Empowering Investors with Non-Traditional Financing

Stephen S. (00:03.423)
Welcome to the show where we interview Excuse me where we interview the nation’s leading real estate entrepreneurs Welcome back if you’re joining us for the second third or a hundredth time and welcome to it If you’ve never been here before you’re gonna get a ton of value out of this today I am here with David Steckel and we are gonna talk everything about his experience of over two decades in the business of running mortgages DSCR loans closing in an LLC non QM loans

and all in between. we’re super excited to get into this. Just remember here at Investor Fuel, we help real estate investors, service providers, and real estate entrepreneurs, two to five X their businesses to allow them to build the businesses they’ve always wanted to allow them to live the lives they’ve always dreamed of. That being said, David, welcome to the show today, brother.

David Steckel (00:42.83)
Thank you for having me. Glad to be here.

Stephen S. (00:52.669)
Man, I’m super excited to talk about this topic with you today on all things mortgages and how you’re able to actually help investors who might be needing to get non-qualified, non-traditional loans for their properties, being able to close, how they can do that, any tips, tricks, and tactics, so that way they can go and acquire more properties, make more money. But before we get all into that, give us just a little bit of background on you. know we had a minute to talk before the show started.

David Steckel (01:03.106)
Thank

Stephen S. (01:19.753)
but give us a little background on where you started, how you got started in mortgages and what’s got you to where you’re at today.

David Steckel (01:25.872)
Yeah, real quick, like a year out of college, I got into the mortgage game. I was back in 2003 and rates just started dipping. was selling communications, telecommunications down in Philly and somebody’s like, man, you should get into the mortgage gig. So I got into the mortgage gig and

Rates were on their way down there. started out refinancing veterans all across Pennsylvania. Preset appointments, I would just drive all over the place. I was in my car nonstop running like six to eight appointments a day and really like helping veterans. that was like the most fulfilling part of my career so far. Fast forward three years later, I moved home from Texas.

and got into the real mortgage world conventional and you know have obviously been through 08 been through ups and downs and you know, it’s it’s like 17 years later and just recently like the last six to eight months I’ve shifted my focus to non QM loan products a few reasons why number one, you know the last two or three years three years have been rough and and competition is 50 % as

you know what it was three years ago, know, 50 % of loan officers are gone. 50 % of agents are gone. Inventory is a problem. Interest rates are high. You know, it’s been rough. It’s been the worst two to three year, you know, stretch in the mortgage industry ever. And I just got sick of like swimming in that red ocean, man. Like everybody’s going after the same type of business. And I saw an opportunity with

you know, the whole AI thing and like just how things are changing as far as like how people make money. This non QM thing just started, you know, popping into my head and the whole investor space thing started popping into my head. I found out about the DSCR loan and I found out, you know, and just, just kind of figured like, look, man, like entrepreneurs, self-employed borrowers are a thing and they’re handcuffed. And since 2008,

David Steckel (03:42.606)
Fannie and Freddie have abandoned them. There’s no more state in loans. And it’s like, these people are the ones that built our country, built this world, took risks, made sacrifices, sleepless nights, not knowing where their next check’s coming from, to create opportunities for the salaried employee. And we make it harder for that guy, the self-employed guy, to get a loan than the salaried employee who’s staring at a clock from three o’clock on waiting to go home. You know what I mean? It’s it’s not right.

Right? Like if both of these people lost their jobs, I would think the self-employed guy, I’d bet on him to be able to make his mortgage payment before this guy. Right? And these guys, even with non-QM loans, it’s still a higher rate. And it just doesn’t make sense. But you add into the fact that like you bring in AI, like AI, these nine to five jobs in the next five to 10 years are gone. They’re going to be gone.

There’s going to be more entrepreneurs than there ever has been. You’re not going to have a choice. You’re going to have to make your own money. You’re going to have to figure out a way to make your own money. So this non QM space is going to explode. The need for these loans for entrepreneurs and self-employed borrowers is going to explode. Fannie and Freddie right now, handcuff investors. You can have a max five, maybe 10 properties, right? It’s not scalable.

You are your your your you’ve got the debt to income restrictions. OK, at some point, your debt to income ratios are going to possibly be too high and you’re done. You can’t close in an LLC. You can’t do more than a four unit property. So it’s just handcuff after handcuff. And I saw an opportunity and nobody does it like loan officers for some reason have refused to get into this space. And like I’m guilty. I was one of them, you know, five years ago.

I’d get a self-employed borrower and be like, great. Like they don’t show any money. You know, they’re doing what government wants them to do and allows them to do and like reinvest in their business. But they don’t show any money. We couldn’t get them approved. It was like a waste of time when you got a self-employed borrower. Now it’s not. Now I’m like the solution to a lot of people’s problems, know, investors and, and, and self-employed entrepreneurs. So, you know, I’ve kind of made that, that a mission of mine.

David Steckel (06:04.954)
and I, I’ve become very passionate about it, as you can tell in my voice. I think it’s, it’s, it’s, again, it’s one of those things and, know, with what we’re going through as a society, you know, we’re almost like rewarding mediocrity. And we’re penalizing those that are like putting it out there and working their ass off and taking risks. Like they’re the ones that are getting penalized. We’re getting the short end of the stick and it’s time that.

Stephen S. (06:10.334)
Yeah.

David Steckel (06:31.522)
you know, somebody steps up and starts educating and, and, know, kind of exposing the mortgage industry and exposing Fannie Mae and Freddie Mac for turning their backs on the people that built this country.

Stephen S. (06:45.387)
Yeah, you you do speak with a ton of passion. And the question that I kind of have is when you’re in that red ocean and you’re going through all these things that are happening with the inventory problem, rates are high, all the same things, it’s knocking the average and lower than average MLO out because they just can’t do it anymore. Was there like some sort of specific experience that you had that led you to shift your focus to this from the more traditional?

David Steckel (06:48.526)
Good night.

David Steckel (07:11.534)
Thank you.

Yeah, so That even made me smile how I responded that like so like When I got back to PA it was a reef. I worked for a refi shop That’s all we did for like 10 years We wouldn’t even do purchases because they were just a pain in the ass, you know and refis were so much easier

Stephen S. (07:16.675)
Haha, I thought there was something there. I’m like man. You’re too passionate. It’s not I have a personal experience Tell me about it

David Steckel (07:42.254)
In 2016, rates had gone up again. They were like 6 % for like the fourth or fifth time. Everybody that had the refinance had refinance probably like two or three times, right? It was dry. Refinances were pretty much dead. I had to get into the purchase world and very quickly I realized that that required me to kiss re-owners asses, to put it bluntly, okay? And I’m not that guy.

don’t enjoy doing that. I’m not good at it, let alone being consistent at it. Like I’m the guy that like has his hand up and I don’t enjoy like just taking, I just feel guilty. It’s the way I’m built. So I started generating leads. I learned how to run Facebook ads to generate leads for agents. I would run them through their business, their business pages. And that’s how I would separate myself from the other LOs that were saying the same thing. I have great rates, great communication.

My products are awesome and I don’t miss closing dates. Well, cool, dude. That’s your job. like, way to go. What makes you different? You know, like these loan officers just have their hands out like this and you see it on social media all the time. They just are up these agents asses. And it’s not, it’s not conducive to a real partnership. Right? So I’ve always been like, how can I help these agents make money? Like I depend on them.

Like, you know, I want their business so I can feed my family. How can I reciprocate that back to them? So that’s kind of like what got me into the whole being different. And the non QM space allows them to open up opportunities if they make the decision to lean in. I made three agents $45,000 last month in commissions because one of them or two of them listen to what I said.

They went back into their database and found two self-employed borrowers and found out that they wanted to buy a house. And I closed both of them using one was a bank statement loan. One was a 1099, one year of 1099s. And the seller, one listing was on the market for two months, no offers. Seller was getting pissed. I come in with this non QM borrower, get that house sold for her. Right? So I made like, I made these

David Steckel (10:05.934)
two agents $45,000 in a month because they listened and they just did what I asked. Just go look, you know, I have it all. I have all this, you know, these programs and material for these agents to implement into their business and like educate their borrowers and themselves become educated with these programs. There is so much opportunity. And by doing this, you’re now giving yourself the opportunity to be that guy, that only person.

in your local market that you send self-employed borrowers to that can’t get approved by your other lender because he’s too scared to go out into the non QM space and get out of his comfort zone and he wants to swim in the red ocean. Now you’re that person. I’ve been focusing on this for like six to eight months and I’m getting calls already like, yo, I heard you’re the guy that gets hard shit done. Yep, that’s me. That’s like that’s my that’s my rep. Like everybody’s coming to me.

When they can’t get their guy approved at the regular loan officer shop who only wants to stick with conventional FHA and doesn’t want to take the extra step to make sure he can handle self-employed borrowers. They all have these programs available. They just won’t get out of their comfort zone. Either they’re too lazy, they’re scared, or they’re afraid that that experience with that referral that the agent sent them isn’t going to be a good one.

And then they’re going to lose the relationship with the agent. Their priority is more leaning towards the agent than the client. And that’s not good. Right? So there’s just opportunity. And nobody’s doing non-QM loans. There’s a few across the country that are really doing well. And I’m getting there.

But I’m helping a lot of people and these transactions that I’m doing now are way more impactful. These are people that can’t even buy their first home. They’ve been denied two or three times and now I come in and save the day? That’s memorable shit. They’re not going to forget about me. They’re not going to forget about that agent that sent them to me.

David Steckel (12:20.29)
So, you know, this is, you know, again, this is why I’m passionate about it. Like, there’s a lot of opportunity to do a lot of good stuff with these programs.

Stephen S. (12:29.951)
Yeah, love that. Now, you said something in there, like essentially what you were getting at. And I’d like to throw in another point in there, and it’s not technically real estate related. was watching an interview when Jeff Bezos was being interviewed about Amazon’s success. And I’m gonna botch the numbers, but just for perspective for everybody. He was talking and he goes, you well.

David Steckel (12:37.591)
Thank

David Steckel (12:49.378)
Mm-hmm.

Stephen S. (12:52.447)
I own 11 % of Amazon or whatever it was. And he goes, you know, yeah, sure. I’m worth, you know, $300 billion. And he goes, when you look at it, when our company’s worth, you know, X amount of money, he goes, you know, even though this is what I’m worth, I only own such a small percentage that yes, I’ve theoretically created this value for myself, but I’ve also created, I’ve also created

David Steckel (13:08.366)
Thanks.

Stephen S. (13:20.223)
you know, seven, 700 billion or $1.4 trillion of dollars for other people. so on a obviously a smaller scale, but like to your point of helping people make money instead of going and doing the ass kissing and whatever else, you literally helped them make money to get what they wanted before you could get what you wanted, which is the whole principle of Zig, where I used to talk about it back in the day, Zig, right? You know, if you just help enough other people get what they want, you’ll eventually have everything that you want.

David Steckel (13:25.742)
Mm-hmm

David Steckel (13:33.934)
you

David Steckel (13:40.322)
Yeah.

David Steckel (13:47.757)
Yep.

Stephen S. (13:49.651)
Where did that mindset come from when you were approaching it from that stage? What caused you to think differently like that?

David Steckel (13:56.206)
It’s just been ingrained in me. I’ve thought about that. even every day outside of work, I can’t sit down and watch somebody cook dinner at my house or do dishes without asking them, do you need help? I feel like a piece of shit. Why am I sitting on my ass? They could probably use my, I don’t know.

Stephen S. (14:19.935)
Mm.

David Steckel (14:26.294)
I had really good parents, know, blue collar, and I’ve been brought up with Christ and I’m faithful and like I’ve just been taught manners and respect for people. And I’ve not always been perfect. I’ve had my periods in life like everybody, but it’s just always I just just can’t I can’t sit around and let other people do the work and expect to like benefit from it. I just think that’s really shitty. And it’s like

I don’t want to work with that person. And here’s the other thing. And this was all kind of confirmed back in the refi boom of 20 to 22. I made the amount of money that I always thought I had to make to make me happy. Okay. And when I made that kind of money and I wasn’t happy, I was like, shit, like this is not good. Like I’ve been thinking about this for like 20 years.

and I finally got here and I feel exactly the same. It’s cool. Like I have more money, but like this doesn’t do it for me. And this has been like my battle for a long time. And I really focused in on finding out what fulfilled me and what fulfills me is helping people and being productive and being able to contribute and being a blessing and not a burden.

And that’s just, it’s just, it’s just carried through to where I am right now. I’ve had a journey with, with God and Christ and, know, I’m at the point, you know, a couple of months ago where I went through like a transformation and. know, there was something that, that happened where that just made me realize like, dude, there’s something bigger than like this. Like there’s something way bigger out there for you than just the almighty dollar. And this just kind of goes into it, man.

You know, after dealing with veterans where I really felt good about what I was doing and I was passionate, I hadn’t been passionate about mortgages for 20 years. It’s just like it didn’t do it for me. I did it because I could make money, right? Like it’s a job, you know, who likes their job? But now I’ve got another, I’ve got this fire, you know, and with everything that’s happened in our country the last four years.

David Steckel (16:50.686)
you know, there’s some, some things that just aren’t right, man. And and it’s time for people to stand up and talk. You know, we’ve been, we’ve been muzzled for the last four years. And, and the fact that the people that build this country, this world are the ones that are getting the short end of the stick just doesn’t sit right with me,

Stephen S. (17:13.885)
You have a real justice centered MO. Where does that come from?

David Steckel (17:15.374)
Okay.

My parents say, you know, it’s like right and wrong. Like I grew up back. I’m 46 years old. When I was a kid, like, dude, it was like, this is right. This is wrong, man. And when you do something wrong, there’s consequences. There are repercussions. That’s how you learn. And and with everything going on today, these kids, you’re seeing what the result of

what the result is of parents being more concerned with being their friend than their parents. And it’s not good. These kids have zero respect. have zero manners. They don’t know the difference between right and wrong because they never hear the word no. They never suffer any consequences or repercussions. So when they get into the real world and the real world kicks their ass, like they’re done for. You know, like I got a 13 and 11 year old boy

I keep telling them, like, man, you get a little savage in you. Like, you’re going to kill this world because like your competition is so soft. Like so soft. Like you had I wish I was a kid right now. Like I would crush it by the time I’m 16 because these kids are weak, man. Like they’re weak. They’re lazy. They can’t look you in the eye when they talk to you. But yeah, man, it’s just like, look, I’ve made

Stephen S. (18:26.492)
Yeah.

Stephen S. (18:32.927)
Yeah.

David Steckel (18:44.948)
mistakes and I’ve owned them, you know, and people make mistakes, own it and be able to forgive. I’ve been forgiven a lot, so like I have to forgive.

Stephen S. (18:57.215)
Yeah, that’s man, that’s so cool that you touched on that a little bit because I and I relate to that so much My wife, you know, like any good wife and good mom who wants to protect her kids You know sometimes thinks I’m a little too hard on him But you know, there’ll be those moments where I’m like losing it on my 10 year old who’s who’s also like it’s an interesting dynamic because he’s technically my stepson, but I’m dad but anyways, that’s a whole nother story for another day, but

David Steckel (19:06.542)
Thanks.

David Steckel (19:21.058)
Yeah, I’ve there.

Stephen S. (19:24.221)
But it’s like, it’s one of those things like I’ll look at him and he’s crying and I’m just like, look dude, you don’t understand. It’s not about this moment right now. I’m not upset at you. I just don’t want you to grow up and be poor. So if you don’t figure this out, then you’re gonna have problems later. So like, it’s not about this moment. Yeah, exactly. So it’s like, dude, you can figure out how to get the fence open and take the trash can out. It’s not that hard. Yeah.

David Steckel (19:36.91)
I don’t want you living in my house when you’re 30.

David Steckel (19:50.584)
They’re not good problem solvers, man. They’re not. That’s the big thing. Like they can’t figure anything out. like, dude, like I coached some of my kids, my kids teams. And every year I asked the other coaches, I’m like, dude, were we this stupid when we were little? Like there’s no way we were this dumb. Like these kids are, they’re dumb. And it’s just like, and it’s all kinds of stuff. not their fault. It’s like the, it’s like the, the, the phones.

Stephen S. (19:53.565)
Yeah

David Steckel (20:17.28)
Everything is just this this this away. They don’t use their minds, you know, and it’s They don’t

Stephen S. (20:23.423)
They don’t get bored enough, man. They don’t get bored enough to where they have to tap into that imagination and that creativity.

David Steckel (20:29.102)
Yeah, you like you wonder why ADD and ADHD is at an all-time high like because these kids need like instant gratification Like none of these kids play baseball anymore because baseball is a slower sport They hate it. It’s so boring to them and it was boring to me So imagine what it is of these kids and I played it through college. I loved it. It’s still boring, you know

Stephen S. (20:37.503)
right, it’s constant dopamine.

Stephen S. (20:51.303)
Yeah. I love it. The only reason I didn’t, you know, I played baseball too. Only reason I stopped doing it is because I was just tired of being out there on a Wednesday night when it was hot as hell outside. And I’m like, you know what? I like basketball more. I’m indoors. I still sweat. No, I get it. So tell me, tell me this, tell me this with, with what you’ve got going on specifically, how is it that you can help? Like, let’s say there’s an investor out there right now or somebody that’s self-employed or, or whatever that might be.

David Steckel (20:59.326)
you

David Steckel (21:12.002)
Eh-heh.

Stephen S. (21:17.329)
And you know, they’re looking to maybe purchase another rental property, something along those lines. They’re wanting to use traditional financing, maybe not hard money or something along those lines. Like how do you really help real estate investors or people that are self-employed to acquire properties? What’s the big benefit that you provide to them?

David Steckel (21:33.3)
number one, it’s access to be able to do it. know, investors, I’ll start with investors again, like Fannie just handcuffs them. a lot of like these non QM products are not new. They they’ve been around for a long time. Like DSCR loan is your debt service coverage ratio loan for investors. It was specifically designed for investors that you can only do it on investment properties. So this DSCR loan takes all those handcuffs that Fannie

puts on you and removes them. Like you can have unlimited amount of finance properties. I’ve got investors that do the BRRRR method. They got 100 properties. You know, they use private capital to raise the funds, the homes, renovate it, refinance it through me on the DSCR, cash out 80%, no seasoning. And they pay their investors back and they just keep doing it over and over again. I got an investor that’s sending me four or five refis a month.

and he’s just flipping them, you know, but he holds them. But he puts them all in his LLCs. There’s no income, right? It’s just straight cash flow. Rents have been doing really well for a long time now. You know, you’ve got your rates are a little bit up there right now, but so are rents, you know? But like, I have zero. I don’t think I’ve had a property come back that was under.

Stephen S. (22:35.412)
Mm.

David Steckel (23:00.238)
Like 1.15 as far as the ratio goes. And like we do, we do no ratio DSCR. We go down to 75, 75 % or 0.75 to 1.25 is the sweet spot. Um, but we’ll do no ratio loans. do, you know, loans that are vacant, like this, again, back to this investor, he’s renovating these things. Um, and when he gets to me, they’re all vacant and I refinance them all the time. They don’t have to, they don’t have to have leases in them.

Stephen S. (23:13.598)
Right.

David Steckel (23:30.178)
you close them in your LLC, any investor out there that’s got any investment properties in their personal name. I don’t know how they sleep at night. The way this country is right now and people just trying to make a buck and sue you for anything. And the problem is the justice system allows it. Cause again, there’s no repercussions, right? You just do whatever you want now and get away with it. I don’t know how you sleep at night. So like, I’m trying to like, like, yeah.

the interest rate’s a little bit higher on a DSCR, like maybe a percent. So yeah, your payment’s like $30, $40 more a month. Number one, you pass it on to your renter. Number two, isn’t that worth it compared to potentially losing your entire net worth by one lawsuit? So like, they’re the kind of things that I go over with my investors that have a portfolio. Like hey, these loans are still,

conventional loans. You may want to think about refinancing them, especially with what’s about to happen. These rates are going to come down eventually. Refinance these loans, cash out if you want, right? Get some more capital so you can continue buying properties and get them locked up into an LLC so you can not worry about somebody claiming a false action lawsuit against you and losing your wealth.

You know, self-employed borrowers and entrepreneurs, know, minimum 10 % down, bank statement loans, 12 months or 24 months, no MI. So you’re only putting 10 % down, but there’s no PMI. And honestly, those loans are easier than, you know, qualifying for your conventional, you know, conventional loans, FHA loans, they go up your, know what, when they’re looking at your income, you know?

Stephen S. (25:23.219)
Right.

David Steckel (25:24.206)
We’re literally talking 12 months of bank statements. And as long as you’re making money, they’re doing an average. They look at your business deposits, they do an average minus 10%, and there’s your income. And these bank statement loans, these 1099 loans, you can do them on primary, secondary, or investment properties. And look, DSCR loan isn’t always the best route, but…

Nine times out of 10 it is, and it’s the smartest route.

Stephen S. (25:56.287)
Man, David, thanks so much for being on the show today. If anybody wants to learn more about you, what you’re working on, where should they go?

David Steckel (26:05.55)
I’m all over social media, Facebook, Instagram, TikTok. I do a lot of content, a lot of videos. I’m really, and that’s another thing that I’m becoming very passionate about. I majored in marketing in college and I’m finally using it 25 years later. So that’s kind of cool. phone number 610-764-9775. You can go to dstechel at Surge MA.

for Surge Mortgage Advisors. I’m gonna be putting some webinars together. I’m gonna be getting out there, man. We’ll definitely stay in touch and hopefully we can push it out to your audience.

Stephen S. (26:46.439)
sure man yeah that’s awesome well thanks so much for being here again and you know go drop him a follow his handle is loans by stack on pretty much every on every platform you heard it here first yeah I love it man you heard it here first folks but go go check him out and give him some love and then if you are somebody that might be in need of something like this go ahead and holler at him as well so I hope you enjoyed today’s show we’ll see y’all on the next episode

David Steckel (26:55.532)
Everything. It’s simple.

David Steckel (27:15.918)
See guys.