Financing Non-Warrantable Condos & Vacation Homes | Michael Rosenblum

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Show Summary

In this episode, Pedro Pereira interviews Mike Rosenblum, a mortgage broker who has transitioned from the food industry to the lending space. Mike discusses his unique approach to financing, particularly in the realm of vacation properties and reverse mortgages. He emphasizes the importance of building relationships in real estate and shares insights on overcoming challenges in the lending business. The conversation highlights the significance of giving more in relationships and the life-changing impact of reverse mortgages for seniors.

Resources and Links from this show:

• • • Investor Fuel Real Estate Mastermind
    • Investor Machine Real Estate Lead Generation
    • Mike on Facebook
    • Mike on Instagram
    • Mike on LinkedIn
    • Michael Rosenblum’s Website
    • Michael Rosenblum on Facebook
    • Michael Rosenblum’s Phone No: (702) 326-3612

  Listen to the Audio Version of this Episode

  Investor Fuel Show Transcript:

  Michael Rosenblum (00:00)
  when a senior is at the point in their life where they’re looking at reverse mortgages options, quite frankly, they’re desperate. I mean, we all know about inflation. People who live on fixed incomes, they can’t afford.

  5 and 10 % yearly inflation on basics like food. You need to find ways to save their quality of life. Reverse mortgages do that. So when I, I love it. I mean, I just, you know, when somebody, when I find somebody who needs to talk reverse mortgage, they’re in a ⁓ terrible financial situation generally, and we get to help them out of that.

  Pedro Pereira (00:21)
  Mm-hmm.

  Michael Rosenblum (00:46)
  and make a living doing it, obviously. And that’s a wonderful place to be as a human being and as a salesperson. I mean, people literally break down in tears when you tell them, yes, I can qualify you. Because for the past, don’t know how many months or years, they’re choosing between medicine and food.

  Pedro Pereira (00:48)
  Yeah.

  Hello, hello everyone, welcome back to another real estate pros podcast episode I am your host Pedro Pereira and I’m joined here today by someone who’ve been looking very very forward to chat with Mike Rosenblum who’s been making some serious moves in the lending and Reverse mortgages space here Mike. How are you doing today?

  Michael Rosenblum (03:00)
  Do it very well, thank you. Thanks for having me.

  Pedro Pereira (03:02)
  Perfect, we’re glad to have you here, man. Really appreciate your time. I think our listeners are going to get a lot of good information from this podcast and really take away ⁓ something from how you’re approaching switching into mortgages and now working with a loan and lending officers in Colorado, ⁓ especially from your experience coming from the food industry to explain all of those little tidbits and nuggets. So let’s dive right in. ⁓

  So first off, for people who not may be familiar with your world, us a short version, that elevator pitch, and what are you focused these days, and what markets are you operating in?

  Michael Rosenblum (03:39)
  So for me, the hard part about something like lending is focusing on a smaller part of it and distinguishing yourself so that you’re different than everybody else. I’m a mortgage broker with Edge Home Finance. We are extremely competitive when it comes to conventional FHA, VA, and that is a significant portion of our business, but it’s not something I spent a lot of time talking about.

  I’m saying we’re cheap, we’re cheaper, we’re cheaper isn’t a selling point. It’s just a fact and okay, I have to prove it. What I do spend time talking about is the alternative and different types of loans that we can do that I couldn’t do back in the day when I was working for a bank basically. So where that took me was, for example, ⁓ I got into this while I lived in Las Vegas.

  And I was told by some of the agents there that they had trouble financing properties on the strip because they were what is called either non-warrantable or condo towels. I took it upon myself to figure out how to do those. And I do a lot of financing of condos on the Las Vegas strip. Three years ago, we moved to Colorado. It occurred to me that the same condo type that is on the Las Vegas strip

  may also be in the mountains. So after visiting real estate offices in Vail, Breckenridge, Keystone, Winter Park, Aspen, Beaver Creek, I mean, you name it, I have been there and we are now, half of my business is financing harder to finance condos in the mountains.

  And quite frankly, this conversation I have with real estate agents and with borrowers on

  how to finance, harder to finance properties has opened up my whole business. Once people learn that you can do a condo tell in Aspen, they’ll might ask you, what about just my jumbo loan in Aspen? Same thing in Winter Park. There’s a number of condo tells up there, non-warrantable condos. These types of loans lead into the conventional, but they all open up me as the person you go to for a wider range of loans.

  If you want to have a one-stop shop, come and see Mike.

  Pedro Pereira (06:49)
  got it. Well, that’s, you know, all in a nutshell, great explanation. Love to hear it. And what really caught my attention is how you mentioned that you shifted over into these vacation resort properties, especially from Las Vegas over into Colorado. It must be a very neat space. Could you, you know, let us a little bit of insight on how you how you change that mindset or how you stumbled upon that.

  Michael Rosenblum (07:11)
  Sure. Condominiums in particular. There is a wide range of types of condos when it comes to financing. Most of us are familiar with Fannie and Freddie, and a condo basically has to fit into a pretty narrow niche for Fannie and Freddie to buy the condo, to back the loan. That being said, that quote niche is a $1.4 trillion market.

  That’s right, with a T. So it’s a huge market. And now somebody says, if Fannie and Freddie won’t buy it, why do I want to buy it? Well, Fannie and Freddie won’t buy if there’s an investor who owns more than one condo in that building. Fannie and Freddie won’t buy it. But a lot of these buildings are bought by people who are buying them as investment properties. If there’s excess commercial space in the building,

  Pedro Pereira (07:54)
  Mm-hmm.

  Exactly.

  Michael Rosenblum (08:03)
  Fanny and Freddie won’t buy it. Now that being said, excess commercial space to be means you’ve got a building where maybe it’s in a ski area and you want to go downstairs for breakfast and not leave the building. That’s a really nice place to have a condo. Fanny and Freddie doesn’t like that. Okay, okay. you’re, Farina, mean, if you’re slope side, in a lot of places, it comes with additional amenities. Amenities like front desks, turndown service.

  Pedro Pereira (08:14)
  Mm-hmm.

  Yeah.

  Ha

  Mm-hmm.

  Michael Rosenblum (08:29)
  They’ll change your sheets. They basically will treat you like a hotel. Fannie and Freddie doesn’t like that. They don’t like having that commercial overlay onto their property. However, for my borrowers, they love the extra amenities. So that niche is a monster in vacation areas. It also translates into Florida and beachfront property.

  Pedro Pereira (08:33)
  Yeah.

  Mm-hmm.

  Right?

  Michael Rosenblum (08:55)
  California beachfront property, timeshare communities that have timeshare in the building, which is very common. There’s a whole host of properties here that are extremely desirable for second homes and for vacation properties, but Fannie and Freddie FHAVA won’t touch. So the problem is you don’t know you’re buying in a property like that until you get your condo docs.

  Pedro Pereira (09:01)
  Mm-hmm.

  Got it. Got it.

  Michael Rosenblum (09:23)
  and your lender says, hey, we can’t touch it. You’re already under contract. The clock is already ticking. You may already have an appraisal. So that’s when I get a call, Michael, we have an emergency. Can you help us? And more often than not, I can help.

  Pedro Pereira (09:26)
  Oof.

  Yep.

  Wow, so.

  That’s a bit like a Superman situation there, sounds great. Seems like you really have an attention to your customers too, which is very important.

  Michael Rosenblum (09:43)
  Well, it’s,

  It’s fun to be needed in sales. I know it sounds funny to say it, I came from the food business. And we had good customers. We sold casinos. We eventually sold the business before the market crashed because of COVID. But I was still selling lettuce. I was selling vegetables. My lettuce was not a whole lot different than somebody else’s lettuce. This is very different.

  Pedro Pereira (10:25)
  Yeah.

  Yep.

  Mm-hmm

  Michael Rosenblum (10:48)
  When I start working with a real estate agent, it’s because they don’t want four different lenders bothering their customer. When a customer calls me and says, understand you can help me, we are under contract, we’ve already put in $25,000 down, can you help us? Generally the answer is yes. If you can qualify for a loan, I can qualify you for one of my non-conforming loans.

  Pedro Pereira (10:48)
  very neat.

  Mm-hmm.

  That’s incredible.

  Michael Rosenblum (11:17)
  and get it done using your existing appraisal, sometimes even the same condo docs. It’s a good place to be.

  Pedro Pereira (11:24)
  Mm-hmm

  Yeah for sure and then it’s definitely not easy to manage both client relationships and all these changing ⁓

  Volatility is in the market. I’m sure you have a lot of difficulty engaging with those and just having to rescue operations there. As you said, helping out the clients that may just have not known what they were getting into. What’s been the key for you to keep things running so smoothly, even when market changes and I’m sure you have very different base of customers? There’s got to be something that you’re doing there to make things run so smoothly.

  Michael Rosenblum (11:55)
  I think the key is that I am now a broker. And for example, it is a different type of a loan. If it’s a condo tell, slope side in Beaver Creek, ⁓ it’s a different loan if it’s got a bedroom or it doesn’t have a bedroom. Previously, when I was with a bank, if it doesn’t have a bedroom, I couldn’t finance it. Now, all of a sudden, I literally have a checklist.

  Pedro Pereira (12:00)
  Mm-hmm.

  Mm-hmm.

  interested.

  Michael Rosenblum (12:25)
  whether it’s a non-mortable, whether it’s a condo tell, whether it’s a studio, under a certain size, over a certain size, you kind of just basically, we have enough experience and we have enough options that one way or the other, I will get the loan done if the borrower is qualified. I still can’t, you know, I can’t make money, I can’t make it happen if the borrower isn’t qualified, but if the borrower is qualified and wants the apartment,

  and wants the condo or the jumbo loan or the house, I can make it work because Edge gives me so many options. And my job is to know the options better than anybody else.

  Pedro Pereira (13:03)
  amazing.

  Mm-hmm. Well, that’s good. Yeah, people come to you for that. So having that is a key differentiator in this and being able to offer so many options as well. But I want to get real here for a moment. know, every operator has had, I know, a moment where things got really real, when things got rough, challenges come up or a deal that maybe went sideways, a time where you maybe had to pivot fast. Do you mind sharing one of those moments with us?

  Michael Rosenblum (13:31)
  Yeah, this was actually a really good point. The company I used to work for, and it’s somebody who wants to look into my background on LinkedIn or whatever, we’ll see that. I don’t want to throw a name out there. I was trying to do these types of condos with the bank, and the opportunity was there to finance it, but they made deals with lenders.

  Pedro Pereira (13:43)
  Mm-hmm.

  Mm-hmm.

  Michael Rosenblum (13:56)
  that I had to abide by, even though they couldn’t complete the deals. So what happened was my one deal in my career that went sideways was because the bank insisted I use a certain lender. And that lender couldn’t complete the deal and I knew it, but they wouldn’t let me leave the lender because they had a deal that they had to honor. That other lender

  Pedro Pereira (14:04)
  Okay.

  Right.

  Michael Rosenblum (14:25)
  For this type of condo tell, the other lender always got first shot and got to say no. Even though I knew they couldn’t do it. They delayed me for two weeks. We only get a month to close deals. They delayed me for two weeks. I lost the deal because of that delay. I quit the next day and went to a broker.

  Pedro Pereira (14:33)
  Yeah.

  Yeah, that’s it.

  Wow, wow, big changes there.

  Michael Rosenblum (15:30)
  So, I don’t know.

  I haven’t had a deal that I couldn’t get done as a broker. Don’t get me wrong. But if I don’t, it’s because I screwed up.

  Pedro Pereira (15:38)
  Mm-hmm.

  Michael Rosenblum (15:42)
  not because the bank made me take a round peg and put it in a square hole and say tough shit.

  Pedro Pereira (15:49)
  Yep.

  Michael Rosenblum (15:49)
  So

  I’m not saying that I’m sure at some point I’ll have a deal that goes bad here as a part of Edge. I know I’m two and half times as busy now as I was when I left my other company and I haven’t had a deal go bad yet. But it won’t be because the bank doesn’t know what I know.

  Pedro Pereira (16:04)
  Mm-hmm.

  Understood. Understood. Now you have more control.

  Michael Rosenblum (16:10)
  And I mean

  they pay us to be experts. They pay us to know our loans and know our borrowers. And they didn’t let me run, do my job. I do not have that problem at all in Edge. They don’t care as long as I get the loans done and I make the company look good while I’m doing it.

  Pedro Pereira (16:31)
  course, yeah. Well, that’s good. Now having that more control, being directly involved in it, I’m sure that you’ve been able to complete a lot more deals. Absolute game changer. And honestly… Mm-hmm. No, go ahead.

  Michael Rosenblum (16:31)
  Yeah. Yep.

  It’s a game changer.

  Yep. And do it in a way that, quite frankly,

  it’s less stressful for me, less stressful for my borrowers.

  Pedro Pereira (16:48)
  That’s kind of stuff that people honestly don’t talk about enough, know, very getting real with experiences about changing and pivoting from what might’ve been mistakes before, learning from them and creating that to be opportunities to move forward. It’s what I really believe too, what separates people from who just dabble in the business to those who actually stay in the game long-term, you know? And let me ask you that.

  Michael Rosenblum (16:55)
  Mm-mm.

  mean,

  the market has been shrinking for the past two years, the total housing market. But it’s still massive. mean, it’s just the amount of opportunity is, but you’ve got to go out and grab your piece. It’s not coming to you. Nobody’s given anything away. And every deal, I’m not the only person looking at my niche. Everybody is looking at niches.

  Pedro Pereira (17:15)
  Mm-hmm.

  Yep.

  Mm-hmm

  Michael Rosenblum (17:35)
  So you better be

  Pedro Pereira (17:35)
  Yep

  Michael Rosenblum (17:36)
  good at what you do and know how to get it done.

  Pedro Pereira (17:39)
  And going a little bit further into that, could you ⁓ lighten us a little bit? What is it that you’re most focused on solving next or scaling within your company?

  Michael Rosenblum (17:49)
  So ⁓ we talked a little bit about this before. ⁓ I also have gotten into reverse mortgages. ⁓ Quite frankly, I love them. ⁓ When you, when somebody,

  when a senior is at the point in their life where they’re looking at reverse mortgages options, quite frankly, they’re desperate. I mean, we all know about inflation. People who live on fixed incomes, they can’t afford.

  5 and 10 % yearly inflation on basics like food. You need to find ways to save their quality of life. Reverse mortgages do that. So when I, I love it. I mean, I just, you know, when somebody, when I find somebody who needs to talk reverse mortgage, they’re in a ⁓ terrible financial situation generally, and we get to help them out of that.

  Pedro Pereira (18:23)
  Mm-hmm.

  Michael Rosenblum (18:47)
  and make a living doing it, obviously. And that’s a wonderful place to be as a human being and as a salesperson. I mean, people literally break down in tears when you tell them, yes, I can qualify you. Because for the past, don’t know how many months or years, they’re choosing between medicine and food.

  Pedro Pereira (18:50)
  Yeah.

  Yeah, no, it’s been, it’s been rough.

  Michael Rosenblum (19:12)
  I mean, it’s just that simple.

  Yeah, so I could take a couple thousand dollars a month of monthly out of pockets expense off their plate and give them access to a line of credit that is based on the equity in their house. And that line of credit is going out for dinner occasionally, maybe seeing a grandchild, retrofitting a house with a wheelchair ramp. This is life changing stuff.

  Pedro Pereira (19:38)
  Yep.

  Michael Rosenblum (19:41)
  and I get to be a part of it, it’s wonderful. it’s so that this, I’ve now set up about 13 classes at local senior centers here in Northern Colorado. And I do, I now go literally senior center to senior center, talking about all different loan options, but really focusing on reverses. So I’ve had anything groups anywhere from two to three.

  Pedro Pereira (19:53)
  Mm-hmm.

  Mm-hmm.

  Michael Rosenblum (20:04)
  Anywhere from two to three people?

  two to three people up to 80. yeah, 80 was too much. 80 was too much to handle. because you really get granular with people and nobody wanted to talk in front of 80 people. But it is a, it’s a lot. It’s just, but you know, when somebody comes to one of my classes to talk about reverse mortgages, they’re basically coming to me and say, I am at my wits end. I don’t know what to do. Can you help me?

  Pedro Pereira (20:07)
  Wow, wow, that’s great.

  Uh-huh. Yeah, that’s…

  Michael Rosenblum (20:33)
  And to be able to help them is wonderful. It’s just wonderful. Yep.

  Pedro Pereira (20:37)
  It is man. A lot of people sometimes don’t think but real estate really is a business about changing lives. know, if you’re really in it for the right reasons and you’re there to help people to give out that information. And that’s what we’re all about here in this podcast as well as connecting our listeners to the sort of information that you are able to provide these real experiences. And I know a lot of the people listening right now are either early in their journey or looking to level up. And I think, I think they would benefit from hearing this from you.

  When it comes to building relationships and growing your network, what is the biggest thing that made a difference for you in this space? What is the relationship that you really learned from, gained? Any insights on that?

  Michael Rosenblum (21:18)
  And the only thing I could say is relationships are never 50-50. Somebody has to give more. Nothing’s ever even, you know, totally. So the only thing I would say is be prepared to give more than 50%. And don’t worry about it.

  Pedro Pereira (21:41)
  Yeah, and if you’re in the space with the right people and you’re able to exchange, I think that that is a great point to make.

  Michael Rosenblum (21:42)
  Okay.

  So I’m happy to help any one of my agents with anything they ask me for, even if they’re not giving me a lead.

  Pedro Pereira (21:55)
  Exactly.

  Michael Rosenblum (21:56)
  it just be

  prepared to do more. It will come back to you. So, I mean, when I got to Colorado, I made, I don’t know how many, probably 50 cold calls, maybe 100 cold calls on real estate offices. Most of them did not give me anything subsequently, but a lot of them asked.

  Pedro Pereira (22:03)
  It’ll come back. It’ll come back.

  Yeah.

  Michael Rosenblum (22:21)
  and

  you give time and expertise. Eventually, a couple of those offices realized, you know, why aren’t we giving this guy a shot? Why aren’t we, you know, seeing if he can really help us? But I did classes, I brought in bagels, I brought in information, I brought in loan programs, and those loans went to other people, predominantly. And not that I didn’t, and I’m not shy, I’m not shy about asking for the loan.

  Pedro Pereira (22:46)
  Yep.

  Michael Rosenblum (22:51)
  But be prepared to give more than you get until you get established. And then…

  Pedro Pereira (22:51)
  Mm-hmm.

  Yep. And you really

  can’t fake that. Relationships are tough to build. You always got to give a bit more. You know, I really… Yeah.

  Michael Rosenblum (23:04)
  That’s right. That’s right. And be prepared to give more. And don’t complain.

  And don’t worry about it. in time, your information is good and your thoughts and your actions are genuine, people will see it.

  Pedro Pereira (23:19)
  You really cannot fake that stuff. really appreciate that very real insight on that. Alright, before we wrap up, if we wanted to reach out, have anyone of the listeners connect with you, maybe collaborate or even partner with you in any business, what is the best way for them to reach you? Phone number?

  Michael Rosenblum (23:35)
  My phone number?

  702-326-3612. That’s a Vegas number. I do live in Colorado now, but I’m licensed all over the West. But yeah, mean the best thing to do is send me a text or just call. Just call. Yeah, I got an email too, but I’m old school. I pick up the phone. Yeah.

  Pedro Pereira (23:48)
  for

  Just call. That’s great. That’s great.

  Yeah, well that’s good.

  Conversations is what keeps these relationships real, so we can see that. Perfect.

  Michael Rosenblum (24:07)
  I’m

  Pedro Pereira (24:08)
  Listen, my friend, I really do appreciate your time, your story and your perspective. We definitely need more people in this space that are doing it the right way. And from what I’ve learned from you, you are definitely one of those. So we thank you for both your help and your perspective here. For those of you tuning in, if you got some value from this, make sure you are subscribed because we have more conversations coming up with operators just like Mike here who are out there building real businesses. Mike, thank you so much for being with us today.

  Michael Rosenblum (24:36)
  Thank you, Pedro, it was a pleasure.

  Pedro Pereira (24:37)
  Thank you everyone, see you on the next episode.