How will rising interest rates affect the housing market? The Power Move Podcast EP 53
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From the art of the deal to keeping it real. Live from the Simply Vegas studios, it's The Power Move with Jon Gafford. Back again, back again. For now, what is... I decided to cut it into two, so we'll do two short episodes this week. Do me a favor. If you'd rather have like two 35-minute episodes that are on different things, I know we drift into a lot of topics in and out. Anyway, let me know. Hit the comments. But...

My name is John Gafford. Welcome to the Power Move. With me to the left of me, as always, is Colt the Bulgarian Mongoose. Am I done? iPhone King. Fucking.

Colt the iPhone. Colt the green bubble killer. He did. He did. No wonder our conversation is much nicer. Do I get five minutes of branding right now? You don't. You just had five minutes of friends on there. And across from us in the studio today, also Chris the Counselor Connell, as always, and special guest in the studio today.

One of my great, great friends, one of my favorite people, loyal soldier, awesome dude, and amazing lender, Joey Siaglia. And the reason I had Joey on today and I asked him to come in today is because today when I was working with all of our agents this morning and I was doing my weekly meeting for our real estate agents, we were talking about the psyche of America when it comes to interest rates right now in terms of house buying.

And I started telling my people, I said, look, the reason your sales are down are not because of the interest rates. It's because of your failure and your inability to explain this to people in a way that makes sense to them.

You know, people with social media these days, everybody, you know, all it takes is one pop-up guru to tell you that, oh man, the bubble's gonna burst and this is it and whatever else. And all of a sudden it's like, well, my cousin Chad saw this guy on YouTube who listened to Gary Vee once who saw a video that had 10X in it. And all of a sudden, yeah, now I'm not gonna buy a house. Yes.

And it's just, it doesn't stop. And so as professionals within the industry, I feel it is the responsibility of agents, of good agents to perpetuate good information into the

the ecosystem of America. And I told them, I said, look, when you see a good chart, I saw one the other day that I loved, which is the historical interest rate chart that showed it, peak it up at like 19% back then. And it shows it and shows like, we're just kind of now back into a normal. I mean, even below normal, still subnormal. We're not in a 2% anymore, but we're still subnormal. And I said, when you see stuff like that,

steal it and reshare it because you're just helping. Now, you know, don't do the realtor stuff where you're standing in the house like, you know, get your day to buy a house for my daddy because we need the money. You know, nobody cares about that shit. But perpetuating facts and things that actually make sense to people are really good. So I wanted to have Joe on today because he is an expert at explaining these things to people in a way that makes sense. Sure. So my first question is, Joe, is, is, is,

Let's talk about you for a minute. Let's get your background. I always want to have people here that are experts at what they do. I like to kind of get the fill on them. I got my license two months ago. I'm feeling pretty good. I'm feeling good. Just passed the test. I'm feeling pretty good. I learned a couple things. That's a great question.

That's right. Coltsman doing commercial real estate. Coltsman doing commercial real estate for 20 years. I don't know if he has a license. And he's only 22, so that's even more of a question. Wait, you have to have a license to do this? For what? For what? Next you're going to tell me I need a law license. Can you go into law school? Get out of here. I was going to become a lawyer next week. The Hollywood Upstairs Law School? Yeah.

Did you get a degree, Chris? I did the full weekend, John. The full weekend? The full law weekend. Put all the time in. Yeah, you got your degree. Some guys quit half the way through. After Friday evening. Did you notice that Joey got an amazing intro? He did. Did we get like Colton, Chris? They know who you are right now. I don't know what they do, dude. The reason people quit on Saturday night at the weekend law class is because they say you got to pass the bar, and then there it is. What's a bar? So they just step in on Saturday. It's all right. I went to drink at a bar. So back to you, Joe. So-

So how long have you been doing this? I mean, I know, but let the folks know. How long have you been doing this? I've been doing this 21 years. 21 years. I just turned 23. So if your mortgage degree...

was a person, it'd be stripping at the Rhino. Is that what you're trying to tell me? No, no, it might be little D's because that place is like, you know, that'll make it through anything. There you go. But anyway, so 23 years you've been doing this. Yes, but you know what's important to mention is I don't know everything. I'm still learning. I'm constantly learning and trying to perfect my craft in this business because...

What might have been six months ago is no longer. So we're constantly having to re-up that knowledge. And it's not just the continuing education courses that make you do every year. That doesn't mean anything. This is staying...

in the know on what's going on in the financial markets. How are the big lenders setting price? Because those are the ones you really need to watch. It's not the mom and pop mortgage shop that's really dictating what's happening out there. It's watching the big boys. It's the Rocket Mortgages, the PennyMax, the United Wholesale Mortgage, all these big guys that have market makers, they have access to the money. They're the ones that are hedging, so you know when they're hedging. Those are the ones that I'm following to make sure that I...

have all the knowledge to pass along to my realtors and clients. To your clients. So let's compare the markets now. Okay, let's talk about, you know, you've been doing this 23 years. And obviously, you know, Las Vegas was the epicenter for the implosion back in 2005, 2006. And in no way am I implying by saying that that it's going to happen again. But what I am saying is,

Part of what caused that crash over and above all of the indicators the ninja loans all of those things that happen nobody I'm skinning gain the rapid, you know depreciation

But what got that ball rolling was consumer confidence in the markets plummeted. So as somebody that was around in 2005, now there's a lot of things going for the market now before you'd be like, oh my God, he's going to say this, the same thing now. There's so many things going on in the market now that are different from then that will prevent that from happening again. But consumer confidence is something that's very important to the health of any market.

Are you seeing, or did you see some similarities when rates spiked up then to now? Did you see any similarities? Actually? No. So in all fairness, I think that, I mean, we have a lot of crazy things going on in our country right now, right? We could all agree on that. And whether it's inflation, whether it's financial markets, whether it's the stock market, they're all tied together in some form or fashion, right? So,

I think that what we've experienced in the last three years with interest rates being at an all-time low, which we may never see again. We may never see a 30-year fixed rate at 2.25% again. And you know what? That's okay. That's okay. That's a healthy market. So I believe we're experiencing a healthy market right now, but there's a little bit of shock value for the people that aren't educated, which is that's why we're here today to talk about getting that education. But you've got...

I believe the Fed made an error in the last couple of years. This should have been done a long time ago. Totally agree. So...

What we've had, what we experienced in the last three years was a gift. We may not get that gift again. So some people that were able to benefit from that, that's great. That's wonderful. But it doesn't compare in any fashion to what we went through back in 2005, six and seven, that was leading up to why everything came down. And the reason just for your listeners that things came down was because the mortgage loans that, that,

These banks were putting out. Garbage. They were garbage. Yeah. But not only were they garbage, they were packaged. As garbage. As gold. As beautiful paper. Yeah. But it was still garbage. Well, because everybody could pass it on and make their fees, right? They just kept going, oh, lender makes our fees. Rating agencies got this thing.

um when you take a strip off a triple a bond throw it in a pile of dog and they would give it a triple a triple a that's the base of what that was so it's just a matter of time before the house of cards comes falling down so you you fast forward 15 years to where we are now for the last 10 we've been writing good mortgages yeah oh yeah this isn't just me talking you guys would know this probably more than me but statistically statistically speaking

people in this country have more equity in their homes than they've ever had in the history of the real estate market. So there's still opportunities out there for refinancing because let's be honest,

Most people are fiscally irresponsible and they're always going to need cash to pay debt off. And, you know, if you can refinance your mortgage loan right now, five and a quarter percent, that's a lot cheaper than paying 26% on a credit card that you're going to carry probably forever. Right. Because people just can't get out. We talked about this last week. So, so to answer your question, I mean, there's just been this huge shift in,

where people have an out. So if Colt loses his job tomorrow, which based on the banter could be a real possibility. And I don't even know if I have a job. And he has to sell his home. Oh,

to live, there's enough money in there to pay the agents. There's enough money in there to put some money in his pocket and move on. We didn't have that luxury back in 2008 because we were writing terrible loans that were put in front of us that were becoming saleable in the secondary market. Yeah. And there was, well, there was just no skin in the game. There was no skin in the game. That secondary market was backed by the United States government based on the everyone in a home dream, right? Yes. Which is just so fundamentally, again,

against market principles, right? And then add on top of that some of these other concepts where it's like, to be fair, we don't take our medicine as a country, right? Having these low interest rates is a way to keep it. You can only go to zero. You know what I mean? And we're almost there. That's not true. They were giving money. Japan was giving money, right? But theoretically, right, you're supposed to take your medicine when the economy is...

you know, bad to help it, you know, jumpstart. You're supposed to use quantitative easing to drop the interest rates. You sell paper, you buy paper. But the other part of that, like we're talking about the dichotomy, is then putting it up when the economy's heated up too much. And politically, it's suicide because if you have an administration, right, that's doing really well, we should cool it off so that you're not, you know, creating that situation. And that's what doesn't happen because it's political suicide. Yeah, this should have been...

taken care of a long time ago. Honestly, I remember when I came to Vegas, that interest rate that I bought was like 5.25%. And I thought, wow, I just made a steal. Because when I first got into it, 7.5% was normal.

If you got seven, you were really doing good. If you got like eight and a half on a commercial loan, you were freaking killing it. That was 20 years ago, right? Cap rates were 9%. Yeah, yeah, yeah. But no, but when I got 5.25% interest rate, I'm like, holy cow, I just stole this.

Right. But now everybody's like, oh, my God, they quoted me five point two five. Like, that's crazy. What's like it's like the Bill Burr deal. How quickly we become accustomed to things we didn't know existed. Five. Yeah. Sorry. Sorry. The online Internet is not going to work this time. There is. There's a sense of entitlement in the market and there's a sense of false security that this is just a normal time. And I would say to some of the newer agents, the agents that work for you.

It's all about the education piece, right? If, if,

The houses aren't going anywhere. I firmly do not believe that we are going to have a massive reduction in price here. I really don't. I feel like people are going to sell because they have to, right? So I would be more concerned about the inventory issues than I would be about the interest rates. Which are up. Inventory is up 50% over the last four weeks. And it's growing. Which is still, but here's the thing, a good healthy market is good for everybody. But it's still insignificant relative to how it's been before. Yes. Tell me where we're going to build here. Where's the land?

Apex Sloan? Yeah. Well, no, and I tell people that all the time, and that's one of the reasons when I give people when they ask why...

Vegas will hold its value. And I say, look, you gotta understand, Vegas is essentially an island. We're just surrounded by sand instead of surrounded by water. We don't have any more land. The land isn't there. And so when you look at this, you've got to look at it as we're Manhattan in the desert. That's what we are. I mean, tide's gonna rise. Speaking of tides, and I said this morning, I said the thing I think that's hurting us in the market more right now

with the nationwide appearance of our market is the damn barrels that keep floating up in Lake Mead. Cause everybody's, everybody's assumed like Lake Mead is like a bathtub and the cork is out and it's going to zero. And we're all going to be drinking sand in like six months where we've had people on, um, from the water district here that are like, look, we wouldn't have, look, it's,

It's bad for boaters. We understand that. But we have plenty of water. Like, we wouldn't have done that. Yeah. This country's not going to let me. It's going to come down to water rights. One of my law professors is a water right absolute expert. Like, nation-renowned expert water rights.

uh in water rights in water right yeah that's that's happy apiary whites and uh happier and so i remember you could have gone fancy right now no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no no

Waterless. Yeah. Okay. That's never going to happen. It may get more expensive to get here, but the water rights issue, we will be able to access water for all time here. I mean, all they have to do is it'll just be costly. They're just going to pull California. California just start. They've got to figure that out. Once you take California out, we're, we're,

do we do not waste water in vegas what do you mean take california out cold california person what are you everywhere we can give them to freaking canada i always heard that the casinos would fly like a glacier and if they had to you know and i just let it melt yeah everybody thinks that's the u.s government i shouldn't say that because of flint michigan right but the u.s government is not going to allow a city

to go out and have no, not the US government. It's going to be the Nevada state legislators and there's enough money. Well, no, you got to have the government. Water rights. That's a government. Divert more of the Colorado River over here. Yeah. It's not, I'm not saying not to worry about it because you don't need the costs of living here increasing, but it's, but I'm, but I'm just telling you as somebody that has their finger on the pulse, cause I hear my agents talk to people that people from around the country really think that.

I saw that mobster guy floated up the other day. You guys are going to be out of water in like two weeks. You guys could be drinking sand. I'm not moving there. I'm just looking around to see if I can buy some scrap metal out of these houses when they all implode. It's like that's the kind of shit. That's funny. Everybody just... That one was probably a mob hit, but the other bodies...

They're not mob, but everybody just wants it. The ones in barrels? That's a mob, but it's only been the one. The other bodies have just been out there, like, just floating. But the New York Post loves to write about it, the Daily Mail, like all that. It's really hurt in Vegas. We talked about it last week. Wait until they start excavating that land south of Vegas.

They already did. They used to find those bodies all the time doing Summerlin, doing the Southwest, but the developers didn't say nothing because you get shut down. That's the problem with Vegas. They love to write stuff. COVID got hit so hard because of a lot of stuff, but they were like, oh, Vegas will never rebound. The New York Times and all that just love to make Vegas such a crazy place

The end of the world always. I don't know why. It does make a great backdrop for disaster movies, though. I will give you that. That's pretty sweet. That's pretty sweet.

We need a Goodfellas 2 where Colt's asking his ma for a knife to get the... He's got to go move the bodies. Exactly. Yeah, last week we were talking about Colt's like, you know, for $5,000, you can get $5,000 to go hunt bodies at Lake Mead. If you find a body, they'll give you $5,000. I go Colt, but after you find like the eighth one, I think they're going to figure out like... Then you end up on the stand. Maybe you know something. I got a good attorney that's going to do... This guy went missing six hours ago. Yeah.

I found them. Found them. Found them. Found them. Oh, what's it? Lake Mead? I found them in Lake Las Vegas. Same thing. So what says you is the best way to ease the psyche? No, no, Colt. Jesus. No. What says you, Joey, is the best? Joey, as you just specified these, the direction of these comments, is the best way to ease people's minds about race. I want to hear what you say and I want to hear what I said and see if it's the same. So,

Honestly, I don't try to overcomplicate things, right? For me, and I harp on this all the time, even with my team of loan officers, some of the newer folks, some of your seasoned folks that work for you, it's all about the education piece. The more you can educate these clients on what's going on,

Because I got to be honest with you, I'm an active loan officer. I get up every day and I go to the office and I write mortgages. That's all that I do, right? I live, breathe, eat, all of this. Since the rates increase, call it 90 days, right? Fair? That was the start of kind of the... I haven't had one person. I literally, I can look you right in the face today. I haven't had one person not buy a house because they felt the interest rate market was out of control. Right?

Not even close because this is normal, right? This is a normal cycle in the business. What the beautiful thing is, is that this sets up the next boom, right? So it's going to, it's going to weed out a lot of the people that are agents and loan officers that are in the business and

Don't have a good book of business. If you're in this business as a loan officer and you haven't focused on building your agent base, you're in big trouble right now. Those guys are in big trouble. They're going back to whatever they were doing before, and then they may hop on for the next refi boom. But the loan officers in this town that are successful, that will continue to be successful, have that agent base built.

And I'm not worried about the market. I'm not worried about the rate. So for me, I don't, I don't wouldn't necessarily say that it's a psyche that I'm trying to correct with people. It's just strictly educating them what the market's doing. You know who your savvy buyers are, you know who your ones that aren't savvy. So you may have to spend a little bit more time explaining things over here to this guy, because he does understand financial markets where this person over here is concerned about one thing. And what's that one thing? Their payment payment.

That's exactly, see that. I'm glad you said that because that was exactly what I said today. I said, it's so important to shift the narrative away from what the interest rate is, because in most cases, the interest rate is irrelevant to anybody in their everyday life. It does not matter. It doesn't matter. And when people start talking about the interest rates are up the industry, you need to get this down. And I tell people, I ask them point blank, do you pay the interest rate every month or do you make a payment on the house?

You make a payment on the house. Get the conversation back to what you can afford based on the monthly expense that it comes out of their pocket.

rather than what they could, how much of a dollar figure of a house they could have bought a month, 90 days ago versus the dollar figure of a house they can buy now. Yep. You're selling payment, not rate. And I said, you need to, and this is what I told my agent study on my team. I said, literally, I'm on this board. I want in 50,000 hour increments from 500,000 to, I think I said 850. Let's just go a little over the median. Obviously, jumbos are a little different, but let's just go in here. And I said, every day as the rates move, I want to know,

what's 10% down with what payment interest is on these numbers. Cause you should know this stuff. You should have a company. When somebody says I'm looking at $750,000 houses, you need to be able to translate that instantly to a payment. Yeah.

So they should be advertising payment on their properties. 1,000%. Yes. You need to be selling payment. And the reason I know that this is what you should be doing is this is what we were doing before the interest rates went to 2%. And people have such short memories and they don't remember how to have these conversations. So let me ask you another question to that point, what John's exactly saying. How many times do you get questions from people or how many times do you hear opinions about the market that are novel? Because I haven't heard one.

I've heard the same four or five or six arguments or statements that are novel or different. Like, hey, Bernard Barak once said, you know, in this, we did a regression. No, they're always like...

There's going to be a crash because there was one before. Bubble's going to burst because all markets are tied. Because of this. This is going to happen, and this is going to happen. There's four or five things that, as an agent, if you don't know how to educate on literally five statements about people's opinion about the market, then you're an absolute failure. Especially in residential. Literally five that I could probably remember. In residential, for sure. This morning, I sat with some pretty smart dudes that were...

They were gone. Every agent also has the same opinion and they rarely to me

Even when they're kind of right, they don't seem like an authority on it. Right. No. When you're an agent and you speak with authority, you go, well, here's why that's not, you know. Yeah, this is why it's not accurate. Here's why that's, here's some information that's going to help you feel better about this. Well, again. That's because they don't know, though. Most agents don't. That's what I'm saying. Educate yourself on literally the five presupposed facts people know. I sat there today against two guys that I won't say what businesses they own or whatever. They own very large companies.

It was Chili's. Oh, it was Chili's. And they said somebody else almost made Chili's list today. Almost did. Really? Cowabunga Bay was right there. Really? Right there, buddy.

I'm not going to hear it. Don't worry. I can tell a story because it was close. There might be another video, but you don't have five arguments. People have these guys were and own them. Most people don't know the education piece. If the agents are educated, how can you expect your client to make an informed decision? If you're not giving them the information, you know, well, here's my problem. Agents want to spend all of their time learning Tom Ferry scripts on how to close appointments. Yes.

They don't learn anything else to say when they're in those appointments. They don't like, if you want to be the trusted advisor, you've got to know the market. Like I asked every, every, every week at my meeting, I was still questions out. How many houses on the market today? And like in Hansel shoot up. And I know those people look every day. Yes. You know, when I asked today, what's the interest rate? I got six and a half, five, two, five, four, eight. I mean, it was all over the place. And I'm like, guys, you know,

How do you not know this? You need to know this stuff. And look, I will boast when we are successful and I will take the hits and responsibility when we are not. That's my fault. And that's why I was like, guys, we got to get better here. It's such a loaded question. And I get the question all the time. How's the market? What's your rate today? What's your rate today? Yeah.

What's your interest? There's so many different factors. What's your credit score? Yeah. There's so many different factors that go into that. But you heard the term subprime, right? So the new subprime is called non-QM. Non-qualified mortgage is what it stands for. Not a bad loan. These loans are designed for people that have specific circumstances, like investors. 1099s, yeah. Yeah. I have clients that...

They make all the money in the world, but he's like, I don't want to give you my tax return. It's 300 pages long. You don't need it. Okay, perfect. So you're going to put 30% down. Yes, I am. Here's your rate. That's your loan. That's your loan. So those, those programs, there's programs out there for everybody, but to, to blanket it with one interest rate makes no sense because a good loan officer, they sell it and they make it understandable to the client of this is why I'm doing this.

This is how much it's going to cost you. This is how much, how long it's going to take you to get that money back. What do you want to do? And then I just turn it over to them, give them the choice. But if you don't give them the options and they can't make an informed decision, then that's on you as the professional. See, that's a, that's a great question right now. Cause I want to hear what you say about this. Today's rates where they are, give or take how long, how long is it? How long would you tell people they need to own a house?

I would say- Based on current market conditions, what would you say? Five to seven years. Okay, good. That's the same thing. Yeah. I tell people, and I said this morning in the meeting, I said, if you plan on being somewhere for longer than seven years and you're renting a house, you're an idiot. Because people say, why don't I buy a house in the market balls? Guess what? You are buying a house. You're buying somebody else's house. You're buying the house of the landlord that you live in. Yes. You're making his payments. Yes. You're buying that. You are buying a house.

So yeah, I agree with that. The rates here are just out of control, right? Yeah, second highest in the country as far as increases. Massive increases. But still though, we have some weird fundamentals here. Yeah, we do. It's still so much less than relative California. Yeah. So people don't understand sometimes you got to look at the market in totality. When you look at Las Vegas, a city of 2 million people,

that has very comparable weather to california which is also a desert people don't realize that most you know until you get to the coast it's basically a desert yeah so you have cheaper house prices than in like baker's field here still you know so as a relative lateral move it makes a ton of sense for most people yeah right as long as you can still work offline you know online or whatever work okay work online did you guys okay do you mess up to see this i gotta bring this up

Did you see those receipts from EDC? Oh, yeah. Receipts? 277. I saw somebody post one the other day. Okay. Yeah. Okay. Yeah. Yeah. I thought crypto crashed. I thought NFTs were in the toilet. Somebody out there is making it. Who got $250,000 to buy bottles of rosé? I think that was the EDC executive party because both of them said EDC kinetic. You think it was their executive tables? I think probably executive tables. And it was the same waitress. It was all spades, glasses. I thought the same thing. But still-

That was my guess. I don't know how these seats work. If I was a billionaire, I could not go drop that. Everybody always says, oh, but you don't have that money drop on it. No, I would not. A, who drinks that much? I was at a table once at $150,000 minimum.

like 40 grand into it everybody's blacked out they come to me and they're like they still have a lot to do i go buy them to get get the most expensive champagne and then that's the table minimum is insanity that is crazy did you see the 30 dollars unmet charge on that yeah 30 dollars unmet charge charge yeah because they didn't spend enough so they spent that much money and then rounded it up

$30 because they did unmet charge. You know, John, one more example, you know, on selling payment for if there's any agents out there that are listening to us right now that this could help them. I always compare it to a car, right? Some people lease cars. Some people buy cars. When you buy cars, I feel like you go in, you get a loan from the bank. You ask what the interest rate is. But if you were to ask 10 people, what's the interest rate on a lease?

Oh, yeah. They have no idea. I have a payment. They would have no idea, right? It's called the money factor. It's called the money factor. The money factor. But they don't know that. So how do you negotiate a car lease when you go into a car dealership, right? You negotiate the money factor. You negotiate the money factor. Absolutely. But I guarantee you, 9 out of 10 people don't know that. So they see the Lexus on TV that I can drive for $499. You go down there, it's actually $780 by the time you get there. But it's because the dealers play with the money factor. It's the same thing. You're selling payment. You're not selling...

what the money factor or the rate is. Yeah, I think focusing on what people can afford in that monthly payment is what is clutch going forward. And if you're- That and explaining the whole rental thing, right? Like I tell people all the time, they're like, oh, should I be buying properties? Are you living in it? Then yes, you should go buy a property, right? Like it's-

I don't know. I mean, you've got people that have been in the same house 15 years renting. Yeah. That's crazy. For example, and let me ask you this too, because obviously with affordability comes issues with prices raising. Yeah. So in our lender that we own, where Joey is the man, straight up,

Streamline home loans. Do we have any, what programs are we having? I'm not selling. I'm just curious. Sure. So what do we have right now? Minimum down payment for conforming loans. 3%. 3% is the minimum. First time home buyer. FHA. Nope. Nope. You're a first time home buyer. You can go conventional 3% down. You gotta have good credit though, because the pricing does take a big hit. So,

That usually is the segue or transition into FHA. So FHA is a tick higher. It's 3.5% down. But there's a lot more leniency on credit, employment history. It's not quite as stringent as conventional. 640 on FHA or 680? No, I mean, we can go all the way down to 580. 580 now. Yeah.

I don't want to advertise that. Come on down to Detroit. But it's in total, right? If they've been at MGM for 20 years and they had a judgment for a medical bill, you can look at all those factors. Compensating factors. And again, and that's why having the market even out a little bit is good for the market because now-

you don't have to have cash. I mean, you know, it's like, it's so funny when a market changes all of the innovations that come into the marketplace. Like for example, we're seeing a lot of those companies now where you can come in and we'll write your offer essentially, which is cash. And then we'll convert it when you sell your house. Well, the rates are terrible and the points are terrible. When we get back to a normal market, now you can just go in with your everyday FHA backed offer. It's going to get accepted. Listen, we have a program.

at your company that it's called fast 15. We guarantee a 15 day close. Okay. 15 day close with an appraisal. And we're closing them faster than that. Now we're closing. I think I did like three last week. We closed in 11 days and we're picking up new agents from other brokerages, not just simply, but other places that we're turning heads. Um, I remember I got a call on Sunday from an agent. Uh, she worked for a different brokerage

And she said, I'm looking at this offer. First of all, it was a Sunday, right? I think I had Luca in one arm. I had like the spatula. I'm grilling my half of them in the pool. And she goes...

Well, you answered your phone on a Sunday, so you go right to the top of the list. And I said, well, I'll always answer my phone unless I'm in the shower or I'm sleeping and I physically just don't have it, right? So she said, well, that means everything because I've called four other offers. I called four other lenders. It's been almost five hours and I haven't received one phone call back. So I got a leg up right away, right? Right.

And now, so then I'm going to, I'll build on that. And she said, so it looks like in the contract, you got an eight day contingency period for the appraisal, 10 day loan, 15 day close. Can you hit that? I said, you give me a contract, I'll prove it to you. We will hit those, we'll hit those dates.

And we closed that loan in 11 days. I got a new agent now. I'm not saying I'm going to get all the business, but at least I'm a horse in the stable. And that's kind of how I've been leveraging what we can do at Streamline that a lot of lenders can't do into building that business and really trying to stay one step ahead. But fast 15, 15-day close with an appraisal. It's awesome. If you're an agent in this market and you're not calling your loan officer asking them, how should I structure this deal? Because we know. We know the timelines that we can hit.

That is about as aggressive as you can get. Kelsey does a great job of that. Copenhaver does a great job of that. Your whole team does a great job of that. But we work very closely together to figure out how we put our best foot forward. And a big piece of that is the speed that we can get these deals closed. Yeah. I mean, again, any advantage you have, and especially...

You know, look, the market is changing, but it's still a seller's market. It still is. I mean, you know, there's stuff out there that is starting to sin a little bit. Seller expectations are going to have to be tempered a bit to the market. But, I mean, any advantage you have to get offers accepted is always good. I have a generalist question. Yeah. Why is a W-2 employee preferred still with lending? Because it's guaranteed income.

guaranteed by the person who's not a w-2 no it's guaranteed by the company so for example a fanny guideline is you can go i got that you see what i'm saying no i understand what you're saying like my employee is technically because nobody's paying my wage yeah right my employee's technically less risky than me it's because you're canadian when you're applying for more because you're canadian it's a canadian i'm american it's a canadian american canadian

Are you? Very cool. Are we going to talk about syrup now? That's him, the Indian story we were talking about. From Canada? Okay. Top five syrups. We'll share some syrup later. Today's episode brought to you by Tim Hortons. Tim Hortons. Get a double-double for a toonie. For a toonie. Right there.

But no, but that's something like just in terms of lending criteria. So I bring this in not because there's probably programs for me who's strictly a flow through owner of companies that pay me. But I generate 100% of it. I am somehow more of a risk than a W2 employee.

For me, they don't even care. It's just as long as you're a W-2. Oh, you've worked there for five years as a W-2 employee, you must be on solid ground because your boss hasn't gone bankrupt.

See, I think you're more risky because you touched a mummy. I think eventually that's going to come home to roost eventually. Do you use the checkbox on a mortgage application for that? I just know because I've done some financing. Is it mortgage fraud if you don't disclose the mummy touch? He disclosed. I saw the video. That's a good thing. Public knowledge. You're on record notice. No, but it's, I mean, the mortgage industry, it runs on salability, right? Yeah.

they're in the business of selling loans. They don't want to service your loan for 30 years. They want to sell it and move on, free up that money and fund more. And so Fannie Mae and Freddie Mac, who are the government's largest purchaser of conventional loans, have guidelines. And those guidelines are,

They like W-2 income because they call it guaranteed income. Isn't that funny? It's guaranteed because I guarantee it. Yeah. I mean, you're, I'll tell you what, I guarantee this. I get a call from, this happens all the time. I don't know what it is with this business, but like the pharmaceutical sales, medical sales rep people, a lot of them when they, so they start out as W-2 and then they get promoted and they call and they're like,

yeah, you know, I'm making 250 a year now. And I went from W2 to 1099. And you're like, you're dead. They make so much more money. So much more. They write off more in taxes. They have a lot more advantages from as a business person. And that's the problem. And it's like, because you can't have it both ways. I remember an underwriter told me one time,

Joey, you can't have it both ways. You want one government institution, Fannie Mae, to believe you made X, and then you want another government institution, the IRS, to believe you made Y because you don't want to pay tax. You don't get to have it both ways. So that's totally fair if there's a discrepancy.

You know, if I am filing on my mortgage, I'd only do this by paying taxes on it. We've said this many times before in this show. Love it or leave it, buddy. That's it. Love it or leave it. Love it or leave it. Love it or leave it. Love it or leave it. Go back to Regina. If you're self-employed, you make $500,000. If you're self-employed, you make $500,000 and you've got tax returns for two years and you didn't write that $500,000 down to three. Yeah.

You're okay. Yeah, we'll finance you, Chris. Oh, well, moral of the story for today. If you are someone that is considering getting a loan, man, don't be caught up in what yesterday's rate was. Don't even necessarily care about what today's rate is. Care about how that impacts you in the deal on a monthly basis. You know, don't buy more home than you can afford. Be shopping payment, be shopping for homes based on what you can afford.

and be shopping with a trusted loan person. So Joey, again, works for my mortgage company that we own, Streamline Home Loans. He's an ace. We love him there. And yeah, so just make sure you're dealing with reputable people. Joe, if they can find you, how can they find you? Anyway, my cell number? What is it, Rob? All right, 702-810-2552. It's Mike Jones. Mike Jones. 0-0-0.

My email address is, I'm going to give them Colts. Give them my OnlyFans.com. Podperson at OnlyFans.com. It's Joseph, J-O-S-E-P-H dot my last name, C-I-A-G-L-I-A at StreamlineHL.com. Got it. Perfect. And so again, if you're looking to buy, focus on what you can. And if you are someone that is in the business of selling homes...

Shift the narrative. Understand what the rates are. Understand how they impact people. Understand how to tell stories that are factual that will explain the market to people and move them from top to zero. Because if you're just focusing all your efforts on scripts that help you get in the door to a listing appointment or how to close a buyer's appointment, there's no value to you. You need to... All right.

You need to educate yourself on the bigger market. So thanks again for joining us for the Power Move. For everybody, if you want more links to what we're talking about, you can click the link below. If you're locked in on YouTube, make sure you give me a like and subscribe. Hit that notification button. Or if you give us four stars or five stars, whatever it may be on one of the podcasts. Five stars.

podcast system. Just like Connell Law has across the board. You're not going to get five. Don't stop by. The highest. That's it. Whatever it may be. 702 Connell. And remember, if you hated what we did today, tell a friend. Blame me. Yeah, no. If you hated, if you hated, no, if you loved what we did, tell a friend. But if you hated what we did, tell two. Because it doesn't matter if we're talking good or bad about you. What does it matter, Colt? As long as they're talking about you. As long as they're talking about you at all. That's right. We'll see you next time.

Hey, it's John Gafford. If you want to catch up more and see what we're doing, you can always go to thejohngafford.com where we'll share any links that we've things we talked about on the show, as well as links to the YouTube where you can watch us live. And if you want to catch up with me on Instagram, you can always follow me at thejohngafford. I'm here. Give me a shout.