Real Estate Investing Financing Tips | How the Right Lender Can Make or Break Your Deal

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In this episode of the Real Estate Pros Podcast, Klint McKinney and Ken Sikes share their perspective as both real estate investors and lenders at Life Changing Lending. They discuss common mistakes investors make when securing financing, how proper lending strategies can improve profitability, and why understanding both the investment and lending sides of real estate is critical. The conversation also highlights the importance of transparency, experience, and using the right loan products to successfully fund and scale real estate investments.

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Investor Fuel Show Transcript:

Klint McKinney (00:00)
What they don’t realize is they went with this investor, they’re bringing $17,000 more to the table than they should. You go with this investor, they’re having to a whole point nap in interest rate higher than what they should. Or over here, their cost is double than what they should. But behind me, this lender has the max leverage with the lowest interest rate with the lowest cost based on that property, based on that project, based on the borrower and the borrower’s experience and liquidity.

Cody Crabb (01:36)
welcome back to the Real Estate Pros podcast. I am Cody Crabb and today joining me is Klint McKinney and Ken Sikes with ⁓ Life Changing Lending.

Ken Sikes (01:36)
scene.

Cody Crabb (01:45)
They’re gonna bring us kind of a unique perspective as people that invest in real estate while also being lenders for people that invest in real estate.

So they kind of know the tips and tricks to make those deals go through. Klint, Ken, I’m so glad that you’re able to join us today.

Ken Sikes (02:00)
Yes, it’s a pleasure.

Klint McKinney (02:03)
Yeah, excited to meet with you.

Cody Crabb (02:05)
Great, glad to hear it.

let’s start with Klint. How did you first get into this industry? mean, it’s not exactly something you see on like the kids’ board of like superhero, firefighter, and doctor, and that’s typically not something you see on there.

Ken Sikes (02:19)
Hehehehehe

Cody Crabb (02:21)
Just out of curiosity, how and when did that start for you?

Klint McKinney (02:24)
Yeah, it’s a question. First of all, thank you. I’m honored to be here. Appreciate it.

So I started a little personal training studio, turned it into a chain of Gold’s Gym Health Clubs when I was in my college, went for sports and business management. And then I decided to change my careers, moved out to California, become a sales trainer for Tony Robbins. And we were promoting a seminar and I went into a mortgage company and

Cody Crabb (02:46)
wow.

Klint McKinney (02:51)
One of the things I asked is like, everybody knows who the top producer is, you know, do you mind raising your hand? They didn’t had a few. then it’s like, you don’t have to say the dollar amount that you make, but you know, what kind of money do you make on a monthly basis? And they’re like, Oh, I don’t mind saying that. And he said a number back 25, 26 years ago that literally go, I’m going back, talking to my wife and telling her I’m getting into Morgan’s business. And that 20, 27 years later.

Cody Crabb (03:15)
Man, man, got you got me curious what

that number is. But yeah, after this long, who knows? but yeah, that’s that is that’s I get it.

Ken Sikes (03:20)
I know, right?

Klint McKinney (03:21)
Well, I still remember today,

this is 26 years ago, 53,780 bucks somewhere in that. 25 years ago, 50 grand is like making 250 grand money today. And of course, it was before the 2008 crash, but I went, told my wife, and within 60 days of being a loan officer, I got promoted to owning my own branch.

Cody Crabb (03:29)
⁓ that’s even funnier hearing that now, yeah.

Ken Sikes (03:31)
You

That’s right.

Cody Crabb (03:37)
Yeah, yeah.

Klint McKinney (03:48)
And then I ran the largest private health mortgage company in the world before the 2008 crash. Not the whole company, but a big part of the state of California, which was 70 % of the business at the time. And then the crash happened and I moved back to Texas with my tail between my legs and started all over and just built it back up from scratch again.

Cody Crabb (04:01)
Well, that’s, yeah, that’s significant.

Wow. All right, and Ken, I’d love to hear ⁓ also from you, like, how did this become the path that you ended up taking?

Ken Sikes (04:18)
As you can see, is way older than me. No, just joking. But I started back in 1999 as a real estate agent with both Keller Williams and worked with Keller Williams and Keller Williams in the century 21. And I was actually in the primary lending and primary real estate, you know, just selling real estate. And back then you’d never believe I would ever be working with.

Investors because I didn’t like investors back then because I didn’t understand I didn’t understand you know an investment part of it so as a real estate agent, I understand that part fully as agent and Then I came, you know about five years ago I came to learn the investment part as a whole as an investor and I’ve worked with several different mortgage companies and in addition to that Which is why I can really say Life Changing Lending was the one for me when I ran the client

It made a major difference because they understood, they understood lending. They understand, you know, the importance of a good lending option package. And that’s what a lot of investors are needing. You know, rather than just coming in and saying, okay, could you get me approved for this fix or flip or whatever? What Life Changing Lending does is give you options, you know, the better, you know, the better grow your, your portfolio. And so it’s more than just a lending company. It’s a, it’s, it looks like a tutoring.

Cody Crabb (05:37)
Hmm.

Ken Sikes (06:30)
They tutored the education to the best out that they is. And that’s what makes the difference. That’s why I can say when I came as part of the life changing learning, that was the best home.

Cody Crabb (06:42)
Wow, that’s

heck of an answer there. ⁓ So that brings me to my next question, because I was going to ask, ⁓ as a lender who also invests, you definitely have this perspective that you might not have otherwise. Ken, even more so if you’ve been in the real estate, it’s been on all sides. And so I’m curious, ⁓ what is it that, our audiences are, let me just say that again, our audience.

Ken Sikes (06:58)
Absolutely.

Cody Crabb (07:09)
they’re real estate investors or they want to be real estate investors. Somebody that’s getting into this, somebody that wants to be a real estate investor or they’re maybe struggling to get financing or something, ⁓ what are the top few mistakes that you see that are like, this is the worst thing and it’ll ruin it every time? The kind of stuff that you might not know right away, not the obvious stuff, but the stuff that’s under the surface a little bit.

Ken Sikes (07:12)
Right.

Klint McKinney (07:36)
That’s a great question, Cody. So we look at two sides of the fence. As a real estate investor, you got to know as far as putting the deal together, the purchase price, the as is value, what the rehab portion of the scope of work amount’s going to be to be able to move the needle so much that you increase the profitability. So you’re after repair values is on point.

based on the comps and the same square footage, bedroom, bathroom count. And we buy real estate and we have it, we add the value to it, and either we do the bird method, and we were doing the bird method long before the bird method was known. And we’ve seen every mistake, both on the purchasing, the contracting, the subcontracting, the moving the needle with the rehab, and then of course the after repair value and then where the market is.

Ken Sikes (08:14)
Thank

Klint McKinney (08:31)
is at that point when you’re ready to ⁓ sell it, which is a flip or do the long-term financing. And then you have to know the other side of the fence, which is the financing. That’s where we come in. You see, lot of real estate investors, they go with the lender because they have a fix and flip product or a DSCR, which is service coverage ratio, or they’re doing new construction. And they go with the lender just because they offer that.

What they don’t realize is they went with this investor, they’re bringing $17,000 more to the table than they should. You go with this investor, they’re having to a whole point nap in interest rate higher than what they should. Or over here, their cost is double than what they should. But behind me, this lender has the max leverage with the lowest interest rate with the lowest cost based on that property, based on that project, based on the borrower and the borrower’s experience and liquidity.

the state that it’s in, the locations, the roles, and not all these data points you have to put together to get the right loan product. So what I’ve done is taken the last 27 years, put a mortgage AI software, it’s taken me 10 months to develop it, create it. And now when we put those data points in, it says the best product in America, whether it’s our product or one of our investor products, we call it friend of me’s, if it’s one of theirs and it fits better, we just go with them. What’s best for the borrower.

But the borrower is not trying to find the needle in the haystack. That’s all the mistakes they’re making. They’re making a mistake on buying it, rehabbing it, over rehabbing it, putting the money in the wrong place, like putting in kitchens and bathrooms and curb appeal and paint and floor plan. They’re putting it in upgrades and adding square footage when they don’t need to. All these mistakes that they’re making or buying it in the wrong…

area or buying the nicest home in the worst neighborhood versus the worst house in the neighborhood. All these mistakes. But then you’ve got the lender mistakes. We keep people from making the lender mistakes that they don’t have to reinvent the wheel. They’re not trying to find the needle on the ace up and they’re not bringing 37 grand more to the table than what they should.

Ken Sikes (10:33)
Big mistake. Absolutely.

Cody Crabb (10:34)
Hmm.

Ken Sikes (11:18)
Absolutely, couldn’t be better. Couldn’t be better. And that’s why I was saying to you, Life Changing Lending, that’s what they do. They make a change in people’s lives by giving all these openings and all these options. And that’s what he is absolutely great at. When I can’t get a deal done, which most of them I would go running to Klint. I’ll ring the phone up to him. If it’s not him, we got another partner, Ryan. We got several different specialties in our company that we run to to get these answers. But he hasn’t, that’s why I call him the CEO or the CEO.

Cody Crabb (11:47)
that’s see, okay. this that you’re doing all the segues for me. I appreciate it. ⁓ But the next question I was gonna ask you now that we’ve talked about like these are the mistakes like you’re looking for that you’re looking in the wrong places for the wrong reasons for whatever lender What is it about like what can somebody do to increase their their chances of getting approved and getting getting that process to go through?

Klint McKinney (11:53)
Good.

Yeah, it’s a great question. There’s so many ways that we can, we call it massaging the deal. We ask borrowers to be fully transparent with us, even though I own the company, I still have underwriters that I’ve got to deal with. I’ve got investors that are bringing money to the table. So either we’re using our money, our warehouse lines to fund the deal, but we’re just like Chase and Wells Fargo and B of A, they have to sell theirs on secondary market. We do too, we just do it faster, quicker, and more often.

But we still have to make sure that the mortgage is approved and we can sell it so we can recycle the money to give it out and borrowed it ⁓ again. So what we tell people is you might have your FICO score might be low because you’ve added too many ⁓ materials on your credit cards and it’s brought your FICO scores down. You might want to do a divorce. We could get past that. have

ways that we can bring a partner in. have experience, experience drives fix and flip and new construction more than it does DSCR or even land. So we bring a partner on to make the deal make it a lot more ⁓ approvable and run through a lot smoother through underwriting. And then we also we get fund. So if they could bring the puzzle pieces that we asked to the table

Ken Sikes (13:11)
Thank

Okay.

Klint McKinney (13:38)
We’ll fund 100%. We’ll not have them make their monthly payments for the first 12 months. So whether we have in the property or building a property, they don’t have to make payments and have to worry about that part. And then with our app, it keeps track of everything. It just makes it go a lot smoother. So we take a look at all the data points we have to put together. Then we tell them, hey, this is what we have to overcome. We can overcome that, but this makes it lot easier for us.

Do you think that’s a possibility? And we work as a true partner with them to make it work. And then that’s what Kenneth comes in. Kenneth literally goes through, collects all the data, packages it up to make it make sense. And with this expertise, all we’re able to do is go, okay, Kenneth, you set this up perfectly. We’re going to go one, two, and three, and we should be able to fund this ⁓ sometime at the end of next week.

Ken Sikes (14:10)
Thank you.

Awesome.

Absolutely. Absolutely.

Cody Crabb (14:35)
All right, all

right, so it sounds like you’ve got kind of a good, like broad view of like what we need to get together, like all the data points that we need to get together to kind of find the perfect balance. ⁓ So ⁓ let’s talk about some of those data points. mean, ⁓ you said that there’s lots and lots of different ones. Out of curiosity, what would you say like are the three that matter the most that could get somebody like

The top three would you say or maybe not three just like

top ones that would could move the needle the most

Ken Sikes (15:08)
Good night.

Klint McKinney (15:52)
Well, they’re all different. People think of mortgages like a here is a one size fit all. All the DSCR, all the fix and flip, all the nuclear structures,

they’re all different loan products, but then they’re different inside their own entity with different real estate investors. So fix and flip experience drives that more than ⁓ DSCR loans for fix and flip and new construction. But

Ken Sikes (16:04)
Okay. Okay.

Klint McKinney (16:19)
But the rehab, if it’s 50 % of the purchase price or less, then it’s more considered light rehab, unless you’re

the whole thing down to studs and building it back from the inside out, that could be considered a heavy rehab. But one investor, that’s not heavy rehab, or if you go over 50 % of the purchase price, that’s considered a heavy rehab. Us, you could go away, if you’re buying a property for 900 grand and you’re spending

Ken Sikes (16:30)
.

Klint McKinney (16:46)
$899,900, one dollar short of the price. We don’t consider that heavy rehab, but the moment there’s a foundation

issue that might trigger a heavy rehab or if we’re adding square footage or converting a garage into extra square footage where we got to get the county involved. All of these are data points that we have to put together and true professionals and someone that’s been in the business for three, four or five years, they struggle with

Ken Sikes (17:00)
Okay.

Klint McKinney (17:15)
all of this that it’s taken us three decades to put together. That’s why 73 % of all our business comes because repeat business or referral business, because it’s a one phone call,

Ken Sikes (17:24)
Okay.

Klint McKinney (17:30)
we know it. And now with our AI, they just put the data in there 24 hours a day. We’re literally going from start of application to pre-underwritten and pre-approval with appraisal order title open.

homeowners insurance with the mortgagee clause and the builders risk policy all done within an hour. That literally cuts two weeks off the timeframe of closing a deal. That’s where our mortgage industry is going and we’re leading the forefront with this and we’re excited.

Ken Sikes (17:52)
Yes.

Yes.

Cody Crabb (18:04)
You know, again, remember what I said about the segues? Again, you’re just doing all the work for me. I was actually just about to ask, so you are both real estate investors yourselves. I we’re talking a lot about the financing part, but you both ⁓ invest in real estate yourselves. Can you give me little bit of info on what kind of real estate you invest in?

Ken Sikes (18:15)
Yes.

Klint McKinney (18:26)
Yeah, short term, short term has been a focus point for a lot of investors, but they’re starting to slow down. We’ve always gone with the single family resident one to four unit makes the most sense for us. But a lot of investors focus on that 10 plus units. The door to the door value makes a lot of sense. So if you’re buying a 14 unit, but you’re only spending 140 grand, it’s $10,000 a door.

That’s not as attractive as if you’re doing 1.4 million for a 14 unit. Now it’s $100,000 per door. So it depends on what areas of the country and where your expertise is. Because if you do a fix and flip, it really doesn’t matter if you’re doing it on a five unit or one unit, but it does matter for the lender itself. So we put that together. Real estate investment could be very tricky. We’ve made 100 grand.

Ken Sikes (19:01)
Okay. Okay. ⁓

Klint McKinney (19:24)
Last year on the deal, we lost 100 grand on

the same type of situation. The market changes, the numbers, the city you have to get permits from, all these things come into play. And you want to partner yourself with people that know both sides of the fence and made every mistake so we can avoid you from making the same mistake while you’re getting into real estate investment.

Ken Sikes (19:44)
Okay.

Cody Crabb (19:50)
And Ken, what about you? ⁓

What kind of real estate investing have you gotten into?

Ken Sikes (19:56)
Basically that’s a single family property. It’s basically what I’m involved with. And I also do a lot of helping investors resell their property.

Cody Crabb (20:07)
cool, okay.

All right, well, ⁓ so in that vein, ⁓ what are some challenges that you’ve had ⁓ in the last little while, ⁓ and how have you kind of attacked them? So ⁓ maybe it’s been availability, it can be whatever, but I’m just curious, what challenges have you seen in both the market and just your personal investing lately?

Ken Sikes (20:37)
Klint do it.

Klint McKinney (20:39)
The challenges is the market. kind of is the challenge of finding a deal is one of the biggest challenges. All the tools out there to help with profitability, know, after repair value comps, our app does all that. It links all the services together and helps our real estate investors know what the profitability is, not just now, but when they go to refinance it, even with the holding costs, even with the

cost of it, tells what the profitability is. But finding the deal, that’s the challenging part. There’s a lot of wholesalers, that’s where Ken comes in. He has a lot of wholesaling background and he has those connections. He helps them find them, then we help them refinance it. But when it comes to buying the properties ourselves, experience. We’ve gone through all the experience, we have the FICO scores, we have the liquidity, we’ll even partner up with people if they have a deal that makes a lot of sense.

Ken Sikes (21:18)
Thank

Thank

Klint McKinney (21:39)
We’ll bring our experience, bring our cycle score, we bring our money to the table to help the deal get done.

Cody Crabb (21:47)
Great, ⁓ go ahead.

Ken Sikes (21:50)
And that’s the ad with that Clinton is absolutely correct. That’s where the majority of the holdup coming from is basically not having, I mean, you have a lot of investors out there and the biggest issue that I’m finding as a wholesaler as well is not having a strong lending source. You see, that’s always have been my experience on where the downfall and that’s where I see and not because I’m with them, I went with it because of that.

because that’s where Life Changing Lending come in at. They assure the investors what they can and cannot do. And that makes a big difference because we have a lot of time to get to the closing table and it just doesn’t pan out. And a lot of investors lose out for that reason. But coming to ⁓ Life Changing Lending, they’re working with us. And again, not because I’m with them, because it works. It works. so that’s a lot of things that go wrong with a lot of investors falling, they’re falling through.

Cody Crabb (22:48)
Okay, yeah, can totally see that. ⁓ So we’re running out of time here, but one of my favorite things to do is to kind of, let’s pretend you’re in a room with a bunch of people that are just getting into real estate investing. They don’t really know a whole lot. They’re kind of nervous to get started and stuff. I’m gonna give you the mic for 30 seconds. What’s the one thing, it’s like, okay, this is the one message that I can get across to make the biggest difference. What would be the message that you would share? It’s like one tip.

that would make the biggest difference in just in

of real estate investing.

Klint McKinney (23:23)
My thing is just get started. There’s so many people out there willing to help people. You’re one phone call away. We’re one email away. You put the data in there that you bring to the table. We’ll tell you what you’re going to get pre-approved for. We’ll tell you if a deal makes sense. We’ll tell you what down payment you got to bring. We’ll help you. helped a 23 year old kid buy his first investment property. 30 months later, he had 23 properties and he started with 10 grand.

Ken Sikes (23:39)
Thank

Klint McKinney (23:51)
He had almost 490 grand in the bank because he did everything the way I told him. He bought the property. He didn’t overrehab it. I was able to give him cash out. And because you don’t pay tax on that, it’s debt. It’s a mortgage. That money comes back. It’s not income. You’re able to stack cash. And we’re one phone call away. Yeah.

Cody Crabb (24:10)
Yeah, that’s a good tip.

All right, Ken, the mic is yours. It’s a

crowd of investors, yeah.

Ken Sikes (24:16)
Basically,

want to echo, just get started. Don’t be afraid. Just make that call. The best advice that I can give is don’t listen to hearsay. Give the call, get the professional input. That’s the best advice because I found as a wholesaler and I trained wholesalers is that they listen to hearsays and they don’t really have the facts. And by calling a good lending company, I’m not saying that we the best, but I am saying we the best.

Cody Crabb (24:27)
Hmm.

Ken Sikes (24:43)
I mean, just call a good lending company to get the facts and just get started. And we’ll take them from there.

Cody Crabb (24:50)
Okay, so if somebody wants to work with Life Changing Lending, what do they need to have or be or do or where do they need to live? mean, those are like, if someone’s listening to this and like, I would love to work with you guys. What do they need? Nationwide, okay, so.

Ken Sikes (25:01)
They nationwide, they just need a

phone. They just need a phone and email. Just give us a call. ⁓

Cody Crabb (25:08)
Okay,

okay. So if someone wants to find out more about how to work with you or ⁓ see if they are even in the ballpark of being able to work with you, what should they do? Where should they go on?

Ken Sikes (25:21)
Just go ahead on and we have an email. We have email there. We are on social media. We also have a main email there that they can contact. We have a website. We have anything they need. I think we have it right there. We’ll put it in ⁓ the app here so everybody can see exactly where they need to go.

Cody Crabb (25:43)
Yeah, we’ll put it, we’ll make sure it’s in the description and everything. ⁓ Life Changing Lending, and I’m sure a quick Google will also get you there just fine. ⁓ Great, well thank you so much for your time today. This has been really interesting from a lender perspective, and ⁓ I appreciate you joining me, both of you.

Klint McKinney (26:01)
I looking forward to seeing this come out. You can also go to loanmatchpro.AI. That’s our AI. You put that information in there when it comes in. It’ll go to Kenneth. He’s the tip of the spear and will be able to give them all the answers that they’re looking.

Cody Crabb (26:11)
⁓ yeah, yeah.

That’s gonna be a great tool for our listeners. Everyone head over there and ⁓ we’ll see you next time on the Real Estate Pros podcast.