Transform Your Future: How to Navigate the Mortgage Industry Like a Pro

John Harcar (00:00.91)
All right, hey guys, welcome back to our show. I’m your host, John Harcar, and I’m here today with Emmett Dempsey. And what we’re going to talk about is ways to buy real estate outside of the traditional ways we always think about. Remember, guys, at Investor Fuel, we help real estate investors, service providers, really all entrepreneurs, 2 to 5X their business by providing tools and resources to grow the business they want to grow and in turn live the life they’ve dreamed of. Emmett, thank you for joining our show.

Emmett Dempsey (00:29.874)
Thank you for having me.

John Harcar (00:30.766)
Yeah, I’m excited to talk about some of this stuff. There’s always the mainstream ways we think about buying properties, but now it seems like a lot of alternative things are coming to light. But before we get into all that, why don’t you tell our audience a little bit about you, your journey, what got you into real estate, and what got you here?

Emmett Dempsey (00:48.55)
Outstanding, we’ll do. Well, I’m at Dempsey in Port St. Lucie, Florida, where the Mets have spring training, which has ended, thank goodness, because traffic is awesome. I guess if I have to be a baseball fan, I’ll root for the Mets, but I’m a football fan and I coach my kids’ fight football. I’m more excited about that.

John Harcar (00:56.014)
Are you a Mets fan?

John Harcar (01:03.331)
Go Dodgers.

John Harcar (01:08.576)
Awesome, yeah, flag football is blowing up, which is really cool, but continue.

Emmett Dempsey (01:12.242)
No worries, no worries. Yeah, because I grew up in Coorson, Lucy, went to college in in the Army and former Army officer, spent a year in Korea, three years at Fort Bragg. Excuse me.

Emmett Dempsey (01:27.698)
potential spam. love those. Anyway, so, yes, Jim Nett airplanes and army officer. I’ve been in mortgage business since 2007. Opened my own company, Treasure Coast Mortgage in 2020. So, and I’m a wholesale broker and my business is mortgages, but you know, also key niches are real estate investors. My wife and I bought Airbnb’s and we have our own properties.

John Harcar (01:30.926)
Mm-mm.

Emmett Dempsey (01:52.914)
The latest one we have now is in Kentucky on the Bourbon Trail. financing those has been key for us. My wife is a company owner herself. She’s a processing company for my companies, other companies like mine. She’s in 10 different states. She does more loans than I do.

John Harcar (02:08.06)
wow, very cool. You know, I like to ask this question to folks because I like to see where that influence. Now you were in the army and thank you for your service. What prompted you to get into real estate or even mortgages? mean, did you have any family influences? Did you have like, you know, someone that you looked up to that was doing that? I mean, tell me a little bit about that entry.

Emmett Dempsey (02:28.869)
No, like most people, we always joke, I totally went to school for that. We all backed into it. It’s always, at that time I was in hotel renovations. actually built homes for Lennar and then was 2000.

John Harcar (02:33.518)
Right.

John Harcar (02:41.941)
wow.

Emmett Dempsey (02:44.369)
Basically right before the crash. So I got in in 2007 and they were hiring. I worked at Countrywide Full Spectrum Lending to tail into Subprime. So I had front row tickets to the Great Recession. So I saw the loans that were being done and like, really? State of income and…

know, pay option arms and all the things. then in August of, you know, I started in May of 07 and August 07 is when everything shut down and then 08 transitioned to Bank of America and back into FHA. So it was interesting to see that transition. And I’ve just been in mortgages ever since.

John Harcar (03:18.37)
Okay, so during that crash time, OA, you were working for these mortgage companies. Any specific way that you pivoted in your business after that, maybe to do something different?

Emmett Dempsey (03:32.562)
Well, yeah, I I worked at a small brokerage and I went to work for a lender, like a call center lender. Then I worked my own mortgage branch in the retail side. And then in 2020, because I became wholesale, which is on the broker side, because they blamed everything on the brokers. And when they rewrote all the rules, all the lenders, you know, kind of stuck it to the brokers. So we went from 50 % market share down to like 7 % or 2%. Now we’re back up to like 25%. So I like being a broker because, you know, having my own company, one, I don’t have to

work for anyone, but I work only for my clients. I offer different options and unique options. For me as a veteran, course VA loans are very key. Also, reverse mortgages are a passion of mine. think they’re much maligned and really misunderstood, so I can offer you right products there. But also, your unique loans like your DSCRs and fix and flips and all the things investors need. I’ll talk about more specifically a way that veterans can own rental property.

John Harcar (04:32.974)
And how long did it take to open up your own brokerage?

Emmett Dempsey (04:37.329)
Well, 2007 to 2020.

John Harcar (04:40.785)
okay. so you had your own brokerage back. Okay, great.

Emmett Dempsey (04:43.057)
I open it in 2020 is when I open my brokerage. Yeah.

John Harcar (04:45.664)
Okay. got it. Okay. Perfect. What were some of the challenges of owning your own brokerage versus, you know, being part of someone else’s?

Emmett Dempsey (04:53.231)
Well, all those things that happened in the background that you got to do it, you got to do everything now. But once you get the flow and call reports and all the reporting and all your tech stack you got to own now, but it’s a choice. You can either plug in and cut your comp that way or control everything, but you control everything. So, it’s with the side.

John Harcar (05:12.598)
Right, Okay, so you went out and built this business. What does your team look like now?

Emmett Dempsey (05:19.433)
My team right now is just me and my Cheryl. I’ve had other ones on my team, but we decided to move like a loan partner to her company because her company had more volume and I run very lean. So I use a lot of technology, like AI and things of that nature to streamline things and I don’t need a ton of staff. There’s other mortgage models that have giant teams. I’m not one of those guys.

John Harcar (05:44.686)
Yeah, yeah, and it seems like a lot of people now would rather have a small, slim, streamlined team versus all the headaches of a big team. So at this time, were you and your wife doing any type of investing on your own? Any type of, I think you mentioned maybe Airbnbs, something like that?

Emmett Dempsey (05:59.922)
I mean, we bought a condo and air-bebied out the main, the one and our son was in college at the time and he stayed there for free. So it kind of paid for itself and then he graduated and we sold it. good that we did because a lot of your assessments on condos in Florida have their own unique issues. So that was starting to rear its ugly head and we got, sold before that happened. But, and Cheryl and one of our friends and business partners bought a good opportunity in Kentucky and that’s what we were working on now.

But I do lot of mortgages for investors who are looking to buy standard investment debt service coverage ratio, DSCR, and things like that.

John Harcar (06:42.848)
Okay, are you still buying any properties or are you just strictly focusing on the mortgage stuff right now?

Emmett Dempsey (06:47.505)
Right now I’m really trying to get my mortgage business really consistently. It’s been tough the last few years with rates coming up, but you know, there’s still a lot of business out there. You know, my primary focus is more mortgages. So if an opportunity comes along, we’ll take advantage of it.

John Harcar (06:58.766)
Got it.

John Harcar (07:02.81)
And you mentioned with the rates going up and all those type of things, know, what other challenges maybe are you seeing right now and how are you trying to combat those?

Emmett Dempsey (07:11.355)
Psychology because you have to come back the fact that twos and threes are not normal

Um, and I started in 07 when rates were in the sevenths and that was normal to me. So it was always, we went from 2007 all the way down to 2020 and and a spot, uh, you know, rates kept getting lower and lower, lower eventually. And then they got really low, really fast. And then you had, you brought forward, I’d say three, four years of production all in two years. And now it’s like, it’s basically, you know, a stream of salmon, you took a of salmon and you move them upstream. And then you’re waiting for salmon at the end of the river.

where’s all the fish at? That’s kind of what happened, know, realtors and mortgage professionals are feeling it right now.

John Harcar (07:46.786)
Right.

John Harcar (07:53.676)
Yeah. Are you seeing any trends coming? Anything new where it might be a change or you know, you might need to pivot some more.

Emmett Dempsey (08:02.777)
Well, I mean, it’s just bringing things out that dusting off the old, like the two one buy downs, three, two temporary buy downs are good to get into a good low payment. But I see investors are still buying because there’s still a supply and demand imbalance and there’s still a lot of folks who want prices to crash or this and that. don’t see there’s demographic imbalance. There’s more millennials and Gen Z that want homes in our homes because you still had that 15 year gap of no

building that happened after 2008 that you may still make it up for. So those are the different trends. It’s finding, getting into the market. And in fact, I’m hosting a class next week for realtors about the cost of waiting. One of the common retorts for buyers these days, I want to wait. And you show that if you wait, okay, what if rates do drop? Okay, great. But yet that house is now appreciated to a point where it’s offset that rate drop.

John Harcar (08:59.628)
Right, right. You might wait for a little rate, but the price is going to go up. And I read an article the other day that, you know, because of the building boom, think in areas like Florida, Texas, and others, there’s a lot of builders that are just really giving a lot more concessions, you know, about rate buy downs and those type of things. Are you seeing that in your neck of the woods?

Emmett Dempsey (09:17.423)
Yes, unfortunately, the builders are, you know, that’s they can just give the house away. I don’t know how long it gets them to do that. Like they bought a bunch of Ford contracts for the lower rates and they’re giving away concessions. I know what even as a broker owner, if I go super skinny, I can’t beat it. Like, I don’t know how they’re making any money. You can only only cut profit for market share for so long. that’s economics 101. So we’ll see how it plays out.

John Harcar (09:46.094)
Yeah, and that’s kind of exactly what the other gentleman said. It’s like, I don’t know how long they could do that. And it is going to be a wait and see type of thing. So let’s talk a little bit about what our topic was today of other ways to buy properties outside of traditional ways. So just kind of tell our audience that maybe it might be a little less knowledgeable. What are mainly the traditional ways that people buy versus your non-traditional ways?

Emmett Dempsey (10:11.707)
Okay. I say, assuming you want to be a buy and hold investor, you want to buy property to rent out for cashflow.

Right? So you do conventional. let’s say you have great income and you want to acquire property. It’s at least, you know, technically 15 percent, but realistically 20, 25 percent down and higher rates because it’s investment property. And, you know, if the numbers work, as long as you buy it low enough and then it works, that’s the traditional conventional. You qualify, you got to get tax returns and all the things. So that’s that’s one way. An easier way is called DSCR debt service coverage ratio based off the cash

of the property, it’s less documentation, similar interest rates, you know, so that’s one way to buy it as an investor. But one way we’ve been talking about, you probably see it online, it’s like if you’re a veteran or you’re FHA, so as a veteran you can buy a multifamily property, technically. So you live by a fourplex, you live in one side, run out the other with three.

that’s technically your rental owner. don’t know, you know, there’s different areas of the country that are more prevalent for multifamily. And of course, you you have to be single because, you know, for me as a veteran, I wish I would have done that in my 20s. So before I have a family, if you plan it strategically, you really could. And even if you don’t want to buy a fourplex as of and I have a YouTube video coming out tomorrow about it. Basically, you acquire one property to live in, you live in a year, then you buy another VA property

John Harcar (11:24.408)
Right.

Emmett Dempsey (11:40.932)
to live in and you could use your other VA property to rent out. then based on what was called secondary entitlement, you can buy multiple properties depending on the purchase price. So many veterans believe that you only use it one and done and no, you can use it multiple times. And now that the conforming loan is 806, 500, it’s crazy. Like I remember it was 417 for years and years where, and that’s how the basis of the entitlement calculation,

John Harcar (11:56.963)
Mm-hmm.

Emmett Dempsey (12:10.835)
Get into the weeds here, but I did a good breakdown on my youtube video that’s coming out tomorrow About it and there’s other older videos, but I this one’s kind of an update

John Harcar (12:20.46)
Okay, well, let’s break some of that down. I mean, let’s jump into the weeds of all that. I mean, like you said, know, most people think that you can use a VA loan one and done, right? I mean, how can they use it multiple times to keep growing?

Emmett Dempsey (12:34.097)
Well, yeah, so you buy the first property and really VA is kind of about four, like because the VA has a 25 % entitlement. And the reason why VA loans can be offered with such good rates is that they guarantee to the lender a 25 % insurance basically. So that’s what the VA that that’s why you can do no money down because in there to the lender’s mind, they’re getting a 25 % down payment because you’re covering their downside.

So say you just buy a $100,000 property. I wish you could, but just for nice round numbers. So you basically use like 25,000 of your entitlement, but you have your base entitlement plus your secondary entitlement up to 806,500. And depending on the purchase price of the next property, there’s a math calculation and I offer a calculator on it about that. it really depends on what your goals are.

for that because if you’re buying more expensive property you you know obviously you’ve most of that entitlement again but basically you have you have like a bank of entitlement that you can use over and over again so as long as you next house you’re buying as a veteran is a owner occupied you know you’ll be able to you know continue to do that

John Harcar (13:49.176)
Okay, are there any mistakes you’re seeing people make when they’re trying to use their VA for, you know, to buy loans, buy properties?

Emmett Dempsey (13:55.344)
Well, you know, not using a broker and shopping around. There’s a lot of veteran friendly lenders that, you know, say we’re for veterans, but when you do the math, their rates and fees can be high. So obviously, any loan, you should definitely shop it around. But I think brokers have had better pricing on that and use a veteran friendly lender to make sure about that.

John Harcar (14:16.792)
For those that aren’t veterans outside the DSCR, mean, are there any other options for somebody to use besides a traditional FHA type of mortgage?

Emmett Dempsey (14:26.289)
Well, mean, mean, FHA is great. mean, FHA is three and half percent down. You can buy a fourplex. Remember, single families, one to four units.

We believe that a single is single. No, it’s one to four units. So you can buy a four unit property or duplex with three and half percent down and live in one side, run out the other. That’s a common tactic that you can do. So that’s one way you can do it. Also, last year, think it was like conventional change our guidelines to where for Fannie Freddie change, where it wasn’t as much down. I think you can do it for a little as 10 percent down now. So it’s already even five percent down.

So, you you can even buy conventional the same way. you’re buying owner occupied multifamily with 5 % down. That is for sure. But they lowered the investment portion of it too. all three, FHA, VA conventional have options for investors as long as you live in the property and multifamily is technically a unit to rent out.

John Harcar (15:27.534)
Okay. Through all these, all your years of being a mortgage broker and whatnot, mean, what kind of, what kind of things are you seeing that, you know, as you’re pivoting and as you’re growing, I mean, what kind of, where are we going for the mortgage industry, right? I mean, we know there’s a lot of things going on in the world. We know that no one knows what’s going to really happen the next day from now, but how are you seeing trends in the industry itself?

Emmett Dempsey (15:54.418)
Well, I mean, a lot of news last week with Rocket buying Redfin and buying Mr. Cooper. want to control the end to end from and remember they bought Truebill years ago where they want to have if you’re even thinking about buying a mortgage in the future, you know, maybe so they have it’s about data. So if you’re a mortgage professional or real estate professional, you know, your database is the most important thing and staying on top of your past clients because what they want is a one

stop shop. That’s they sold their investors.

They don’t spend billions of dollars to not control everything. They want to control from rocket money, as they call it now, to you get your first mortgage and then your second mortgage. then you service the mortgage now with Mr. Cooper. They just added four million new customers, like two trillion in mortgages. And it’s crazy. And they’re marketing engines with AI and things like that. So I have with my CRM some AI tech.

technologies, again, with that we can compete. But that’s also a good thing about mortgages, because even though we see rocket money, the rocket only controls like 5 % of the market. It’s still a very fragmented market that a good smart originator or a realtor can really do well, but you have to stay on top of your people and really manage your database well.

John Harcar (17:20.526)
seems like you’ve had a lot of success over your years, right? It looks like you really kept growth. What do you contribute your keys to success of staying on top and keeping, know, keeping up with the Joneses? I guess you could say.

Emmett Dempsey (17:31.782)
Well, mean, for me, I’ve been coached, I’ve been in coaching. I believe in it to structure your day. think how you structure your time, it’s the one resource we all share that you can’t get back. I’m very specific on my theme days. I do certain things certain days. Mondays I call my realtors, at least 40 of them a day. And then on Tuesdays, my updates to each side. And every single time they say, well, nobody really ever calls me. Nobody ever does this. So you can differentiate yourself.

I just being structured like today’s Wednesday is my pal day, my pre-approved looking. So I’ll call all my pre-approved folks who are out there looking and their agents as well, you know, and that’s, Hey, anybody else you’re working with and you know, to ask for referrals. And then on Thursday is my data bank day. So I’ll call, you know, like two letters of the alphabet from my past clients today. Hey, how you doing? Just kind of reach out to stay top of mind. And then Friday is kind of like a wild card. I’ll reach out to other partners, you know, mainly these days like financial advisors, CPAs and kind of other referral partners.

size real estate agents.

John Harcar (18:33.23)
That’s a great little nugget right there. Really being structured, and I think it really comes down to working with intent. Knowing each day what you’re gonna do, it really makes your work a lot, it’ll go a lot smoother probably. So if someone’s looking for some information on a VA type of loan or using that, what advice would you give to them as far as, this is how I’m gonna get into doing this?

Emmett Dempsey (19:00.753)
Well, I have a conversation with a professional that you trust. Obviously, if you’re in Florida and Georgia, I’d love to talk with you. He’s going say, OK, here’s where you are today. Here’s where you want to go. Here’s the possibilities. And the way that I present options is through program called Mortgage Coach. I believe in video, not only for social media and YouTube. That’s been a great way folks find me. But also, I call it tactical video. So I do one to one with this mortgage coach. So hey, Jim, here’s what the options I see.

is not unconventional. if you put down 5 % or 10%, and I did a few refis, like a guy wanted to do 30, 15, or 10. So there are options. So the way you present options and what’s best for you, and I let my clients decide. But ultimately, having that client experience where you understand what is possible. It’s not just about just rates and fees. mean, those are certainly important, but it’s just about the overall experience and what’s the total cost of this action. Because people are so, they also get so

focus like the rate rate rate rate rate rate because that’s what our industry pounds it pounds them with unfortunately and it’s about the cost too. Is a higher rate actually cheaper? Sometimes it might be so having those conversations around numbers and a good platform that’s know mobile friendly is very key.

John Harcar (20:21.112)
What do you think some of the challenges are in your business right now?

Emmett Dempsey (20:25.595)
Again, it’s really a psychology. know, the, like, I want to wait. You know, there’s a large, it’s just, there’s sticker shock. We’ve had a huge…

increase in property values. There’s a narrative out there, well, back in the 80s rates were 20%, yada, yada, but yeah, prices were also much lower. mean, payments are higher. the biggest thing is like, I didn’t think that payment would be that much. I’m like, well, math is math. That’s just what’s going to happen. But you can kind of show even a buy versus rent. And it’s just having those conversations, even a buy versus rent. can spend in five years, tens of thousands of dollars on rent that doesn’t go in.

anywhere, or you can do amortization. Even if the appreciation is zero just by making your mortgage payment, you can make a payment one way or another. Just understanding where you’re at today, where you want to go, because the numbers play out. The survey of consumer finances, homeowners are 46 times wealthier than renters. Forty-six times.

That’s government data. So you want to wait and lose out. There’s also a report we do called a cost of waiting. just based on where we think rates might go and general appreciation, historical averages, what you’re losing. It’s like, hey, I want to wait. OK, well, you want to cut a check for 15 grand or whatever it is by waiting two years? That’s what it’s going to cost you to wait. So it’s about having real conversations to understand, yes, of course, I’m a mortgage broker.

we get paid to do mortgages. Great. But, you know, this is why you want to want to do that. And, know, very, you know, transparent by way we do things.

John Harcar (22:06.286)
Do you have, I know you miss like the videos, do you have any type of coaching that you do for folks or is this just kind of like when they reach out to you, you coach them on the call and those types of things? Like do have a coaching program, anything like that?

Emmett Dempsey (22:17.649)
Bye.

I don’t know, like maybe I should, maybe I should, I should build a course. No, but, there’s no coaching program or course. find I try and do videos on topics that they’re searching for. Um, my general, I guess, content buckets are, you know, BA and reverse mortgages. And that’s, that’s on the other side of the spectrum. I think the reverse mortgages are much blind and misrepresented. And I think that’s a huge opportunity for, for seniors who are sitting on $14 trillion of equity.

and what do they do with it? So that’s definitely a good conversation.

John Harcar (22:54.488)
Okay. How do folks find you? How do folks find these videos? mean, do you have a YouTube channel, Instagram? I mean, how do folks get in touch with you to talk?

Emmett Dempsey (23:03.951)
Well, mean, Instagram is the best communication vehicle. You so you just search my name, Emmett. There’s not very many Emmetts out there. Emmett MC. So you can Google my name. You can kind of see all my reviews. My YouTube channel is there as well. Those are more long form videos. I don’t do any YouTube shorts on there. I do all long form there. I’ll have some on Instagram and TikTok. I’ll do like short form, know, bite sized ones.

John Harcar (23:28.686)
Okay, very cool. Well guys, I mean, I hope you guys enjoyed this talk. Emmett, thank you very much for coming on and sharing all that. I hope you guys wrote down some good nuggets and I hope you guys all had a great show. Emmett, thank you again and once again, thank you for your service and guys, I’ll look forward to seeing you on the next one. Cheers.

Emmett Dempsey (23:45.564)
Thanks, John.