How A Great Lender Helps You Win Offers | DSCR Loans, Investors & House Hacking with Kathy Vasel

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Show Summary

In this conversation, Kathy Vasel shares her journey from being a salon owner to becoming a successful mortgage advisor and investor. She discusses the skills that translate between the salon and real estate industries, the importance of understanding the lending landscape, and the rise of DSCR loans. Kathy emphasizes the need for flexibility in lending guidelines and provides insights into the multifamily market. She also offers advice for new investors and loan officers on how to navigate the real estate market effectively.

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
    • Kathy Vasel’s Website
    • Kathy Vasel on Facebook
    • Kathy Vasel on Instagram
    • Kathy Vasel’s Phone No.: (978) 502-2998

  Listen to the Audio Version of this Episode

  Investor Fuel Show Transcript:

  Kathy Vasel (00:00)
  I think that a lot of lenders don’t understand what investors are looking for and ⁓ they have a harder time possibly with it because if you think about it, lenders a lot of times are what we call shopped in the market where everyone is looking for the lowest interest rate and when you’re a real estate investor, you’re not getting the lowest interest rate because you are more of a risk.

  to the servicer or the lender, the bank, than you would be if you were owning it as a primary residence. So I don’t know if it makes an uncomfortable feeling for most lenders ⁓ to offer or try to talk to investors knowing that it’s a higher interest rate. I’m not sure what their thought is. My thought is, you you need to leverage your money and get it to work for you.

  Dylan Silver (00:35)
  That’s right.

  Hey folks, welcome back to the show. Today’s guest, Kathy Vasel is an investor and mortgage advisor in Massachusetts with Cross Country Mortgage and is also passionate about helping families grow their wealth through real estate. She’s also been featured in Boston Magazine and Top Agent Magazine. Kathy, welcome to the show.

  Kathy Vasel (02:49)
  Thank you very much. It’s nice to meet you all.

  Dylan Silver (02:52)
  Yeah, nice to meet you as well. And I always like to start off at the top of this show, Kathy, by asking guests really how they got started in real estate.

  Kathy Vasel (03:02)
  That’s a great question. That’s a long time ago. we got started in real estate. I say we meaning my husband and I, because I actually was a salon owner at the time, a top 200 salon in the nation. And my dad was my, he financed it for me and wanted to retire. So I decided that we needed to sell and.

  when we were selling, was like, okay, what am I gonna do once I sell? when you’re a business owner versus a regular hairdresser, you just don’t make as much money as a hairdresser. So we decided to sell and I was like, okay, what else can we do? And I said, let’s take the money and invest it in real estate. And so that’s kind of how I got more involved in real estate. When my husband and I got married, he actually,

  owned a rental property. I hated it. But then I started reading all these books by what’s his name? Rich dad, poor dad guy. Robert Kiyosaki, I read all his books and then I was hooked. So that’s when we took the money from the sale of the ⁓ salon and invested in real estate. And that’s how I got involved.

  Dylan Silver (03:58)
  Thank

  Yeah, Robert Kiyosaki,

  You know, when I think about the salon space, there’s actually a lot and you may say, Dylan, you know, I didn’t even think about that. Or, you know, maybe I’m off point here, but I think there’s a lot of overlap between the skills and what makes a successful salon and the skills and what makes someone successful in real estate. And I’ll give you two things that come to mind. Number one is that just because you, you know, telling people, hey, I own a salon or hey, I’m a realtor doesn’t mean they’re going to come to your salon. Doesn’t mean they’re going to trust you.

  Kathy Vasel (04:38)
  Mm-hmm.

  Dylan Silver (04:48)
  with being a realtor, in your case, a mortgage advisor, right? It takes a certain level of marketing, your inner sphere, but then also connecting the dots and that level of trust. Going from that salon space where you had a successful salon into the real estate mortgage space, did you feel like it was a totally new thing or did you feel like, okay, I’ve been a business owner here before, there’s a lot that translates here?

  Kathy Vasel (06:01)
  Yeah, I mean, you are right. There’s a few more things too to talk about. if you’re touching someone’s hair and you’re like cutting it, it’s like you have like the license to actually physically touch them. The only other people in the world would be a doctor. And ⁓ you learn so much about someone when they’re sitting in your chair. And I thought that that was, ⁓ you know, a peek into their world.

  But when you become a loan officer, there’s just so much more that you learn about a client and their goals when you are basically stripping them and finding out about all of their finances and how they want to grow their wealth. So there is a deep connection on people’s personal ⁓ growth and their desires. And so there’s definitely that connection as well.

  Dylan Silver (06:57)
  You know, the loan officer side, and I tell this to all the loan officers who I have on the show, I say I don’t necessarily regret getting in as a realtor, but sometimes I think, well, I might have been better off getting in as the loan officer because it starts and ends with that. I mean, I can’t go show somebody homes, especially now with the way things are, until they’ve got some type of prequalification happening. So did you know going in, hey, I’m going to get in on this side because this is,

  Kathy Vasel (07:20)
  That’s right.

  Dylan Silver (07:26)
  I don’t want to say more important, but it does feel that way. So I’m not going to go the route of, you know, being a realtor. I’m instead going to go the route of helping people get financing.

  Kathy Vasel (07:36)
  No, I actually didn’t even think about that piece of it. I’ll tell you how I got from the owner of a salon to the real estate investor to becoming a lender. My niece was a lender and she actually was like, why don’t you come over my house and I’ll show you how to become a lender. I told her I would be awful doing that. And she said, no, come on over, I’ll show you. So she showed me and I loved it and I became a lender and she ended up becoming a hairdresser. So we swapped.

  Dylan Silver (08:06)
  Did you help her at all with guidance as far as the business?

  Kathy Vasel (08:07)
  But what-

  Yeah, a little bit. But the funny thing is that you said about the realtor, I would, ⁓ I considered becoming a realtor and not a lender. And I just couldn’t do it because there’s no way I could show people homes and go in basements. I just wouldn’t want to go in basements. So that’s why I didn’t become a realtor.

  Dylan Silver (08:27)
  Yeah

  The East Coast, especially the Northeast, that’s the thing. There’s really not no basements. I shouldn’t say no. There’s very few basements in Texas where I’m licensed. But yeah, there’s a basement everywhere you go. the thought process is like, you know, these homes are having to have a deep foundation anyhow in a lot of these areas. They have to have a deep foundation. So you might as well have a livable area down there. And you know what’s interesting, going back to the point of being a loan officer is

  Kathy Vasel (08:43)
  there is.

  Dylan Silver (08:59)
  There’s all this, I would say, frenzy and it seems very attractive to be a realtor and you’ve got reality TV shows and it seems like this wonderful thing. We need as much of that in the lending space, because we need more lenders, I feel. We need more people to glamorize the lending space, because truly the deals live and die starting with can you get an approval? And if your lender says no, a lot of people feel disheartened and then they may give up for a while.

  Kathy Vasel (09:22)
  Thank

  That’s true. I mean, I don’t know if we need more lenders. I think that we just lost a bunch of lenders due to the fact that they came in during COVID and it’s not as easy to get the business anymore. But I can say where I work now, we have every single loan product here in America, pretty much. So I ⁓ don’t have that problem that other lenders may have.

  because we have such a wealth of products.

  Dylan Silver (09:58)
  So this is something that I’ve noticed. You’re one of the first people that has mentioned this, know, really a widespread of what you can offer. I’ve seen this, that lenders typically fall into, work with investors, I work with retail buyers, but very, very rarely do they ⁓ mesh between both. But you work with both. Do you have an idea as to why there is this separation between, you know, lenders who work with the investors and why there’s folks who don’t?

  Kathy Vasel (11:02)
  I think that a lot of lenders don’t understand what investors are looking for and ⁓ they have a harder time possibly with it because if you think about it, lenders a lot of times are what we call shopped in the market where everyone is looking for the lowest interest rate and when you’re a real estate investor, you’re not getting the lowest interest rate because you are more of a risk.

  to the servicer or the lender, the bank, than you would be if you were owning it as a primary residence. So I don’t know if it makes an uncomfortable feeling for most lenders ⁓ to offer or try to talk to investors knowing that it’s a higher interest rate. I’m not sure what their thought is. My thought is, you you need to leverage your money and get it to work for you.

  Dylan Silver (11:38)
  That’s right.

  Kathy Vasel (11:57)
  To me, it doesn’t matter if it’s a low-interest rate or a high-interest rate, as long as that real estate investor is making the money, that’s what you want to do.

  Dylan Silver (12:09)
  Yeah, I mean, look, it’s an investment. It’s why would you invest in real estate at all if you have the option to put in like an index fund? It’s because it’s tangible. You can have some more level of control over it. Sure, there may be greater risk, but there’s also, you know, greater reward. I want to pivot a bit here, Kathy, and ask you about what I’ve seen as this trend. I wouldn’t say across the board, but I do see this happening more and more.

  Kathy Vasel (12:16)
  Exactly.

  Dylan Silver (12:33)
  Products from the investor world seem to be making their way into the retail world. The biggest one that I see is DSCR I was speaking to some very, you know retail focus don’t work with investors really at all to my knowledge type of lenders in Texas and even they had DSCR so how did this trend happen and are we gonna see more of

  Kathy Vasel (12:40)
  Mmm.

  So I think it might have happened because so many, I mean, I don’t know for fact, but I think personally what might have happened or professionally, my opinion would be because so many home buyers have been scared to buy a home that the lenders were looking for another resource of income. So that’s why they were turning to products that would appeal to the investors. ⁓

  The DSCR loans are attractive to investors because they don’t have to provide tax returns involved when they’re buying the property. they could literally, if they’re self-employed, which most of them are, they have this income coming in. The reason why they’re self-employed is normally to be able to have write-offs and not pay a huge chunk of change in taxes.

  So they’re writing off a lot of their income and then they don’t qualify for a normal bank loan. Therefore, they need another type of product to get qualified and that’s where the DSCR is one of the options to come in. So I think that’s why a lot of the ⁓ lenders are starting to bring it on. The difference is, I have to say, sorry to interrupt you, but the difference is, cross-country mortgage where I work,

  Dylan Silver (14:11)
  That’s a man.

  Kathy Vasel (14:17)
  We own our guidelines to all of our portfolio products like DSCR and the other lenders, they have to broker those loans out. So they lose control of getting that loan closed and processed, which is ⁓ not good because it can delay things and just frustrate the buyer.

  Dylan Silver (14:44)
  Mm-hmm.

  Kathy Vasel (14:45)
  the seller and ⁓ the two real estate agents if there are involved. So it’s just a much cleaner process when we can own the guidelines.

  Dylan Silver (14:53)
  Right, right.

  When I’ve talked with lenders about the different types of loan officers and brokers versus direct lending, some of these terms, even to me as a realtor seem confusing to the general public. They just may be kind of lost upon this. Can you break down, you mentioned these guidelines, really what that entails and what’s the difference between what you’re doing and what other folks who are not in the same guidelines are doing?

  Kathy Vasel (15:23)
  as far as a guideline perspective or as far as the… ⁓

  Dylan Silver (15:27)
  I guess

  breakdown first what that is for folks who may not be familiar with it and then also to you know what other people might be doing that’s maybe different or a candy-capped in a way limited from what y’all are doing.

  Kathy Vasel (15:31)
  Okay.

  So the guidelines would be how to qualify a borrower and or a property. so when you as a mortgage lender like myself, if I have to broker that out to a different company who’s going to underwrite the loan, it creates less control of the process.

  you really don’t have the ability to get an exception. If there’s like a little tweak to be made to get ⁓ what I call a good common sense loan to get it approved, they still may not approve it because ⁓ we don’t own the guidelines or they don’t own the guidelines and so they can’t get the exception. Internally, when you own the guidelines, we can get exceptions the majority of the time because they’re just more apt to give a yes.

  So that would be the difference as far as brokering and not brokering. ⁓ But as far as the guidelines are concerned, we can actually get more flexibility to get a client approved for a home, even with the DSCR loan product.

  Dylan Silver (17:32)
  want to pivot a bit here, Kathy, and ask you about the multifamily space. I’ve seen more and more interest in multifamily, not just because of, you know, the potential cash flow opportunities, but also because from what I’ve seen and heard, there is a fair degree of distress on the operator side and some of these smaller and then larger multifamily properties. Do you have any experience in multifamily? And what’s your perspective on you know, what may be happening in the multifamily space right?

  Kathy Vasel (17:36)
  Mm-hmm.

  I think that I’m not really sure of what you’re questioning me, so I’m going to try to answer you. Are you like asking me, reword your question. thank you.

  Dylan Silver (18:11)
  Let me reword it. I can

  speak and maybe there’s a different trend happening in the Northeast, but in Texas specifically, got a lot of vacant land, right? And so you’re seeing right now there’s been a lot of new developments, a lot of multi-use facilities, but then also a lot of commercial residential apartment complexes and the like. And this seemed to really just boom five or six years ago.

  And so people were creating funds, syndications and investing, not just in large apartment complexes with hundreds of doors, but also in units and complexes that maybe had 50 doors or less, maybe 25 doors or less. But all the way from the top of that down to a single owner who may have several town homes, I’m seeing that there is some distress both because…

  There may be adjustable rate mortgages that have gone up. There may be ⁓ rent issues. They were predicting rents to increase and they ⁓ stable off if not gone down. But then also a lot of their exit strategies for their investors were, hey, we’re going to exit this deal at five or six years and it’s now that time and they can’t because they don’t have the equity to do so. Do you have any experience working with those type of investors? Also, what’s your perspective on multifamily in general?

  Kathy Vasel (19:17)
  Mm-hmm.

  Okay,

  now I understand better. So a lot of it what you’re talking about is more commercial and we do less commercial I’m more involved with residential. However, I will say this market in the Northeast is is very strong. We hold our values and So I could definitely see in Texas or in the south or even out West There’s a lot more probably of what you’re seeing in regards to that

  concern, but here ⁓ there’s just not as much of it. There are commercial buildings that have, since COVID, been vacant. ⁓ We’re seeing some developers going in, like for example, ⁓ Littleton, Massachusetts, there’s a huge IBM building and they’re going to be putting in condos there with a whole

  kind of like resort feeling of stores and such. So I do see that happening. ⁓ I don’t know if that answers your question.

  Dylan Silver (20:41)
  No, yeah,

  I’m always curious to get people’s perspective on this because, especially as an investor agent, my myself, sometimes I have folks tell me, well, should I buy, you know, ⁓ short term rental? Should I look for a heavily distressed property and flip it? Should I go quadplex? My friend has a syndication that he started in Houston, Texas. I’m thinking about, you know, being one of several people who own several hundred doors. And so there’s so many options for people to get. I mean, ⁓

  Kathy Vasel (20:49)
  Mm-hmm.

  Mm-hmm.

  Dylan Silver (21:11)
  in the business, you talked at the top of this show about how you got in on the rental side and didn’t necessarily love the business there, but have since changed. For folks who may be looking at making that first investment, my feedback has always been you have to find the investment that works with your schedule, that works even with your personality, right? It may not be best for you to have an Airbnb if you don’t necessarily love the idea of

  Kathy Vasel (21:34)
  Thank

  Dylan Silver (21:39)
  turnover and cleaning and like being a host, so to speak. What’s your perspective on, know, folks who may be looking for that first investment and how to correctly guide?

  Kathy Vasel (21:43)
  Exactly.

  Right. so a lot of it too is based upon what are their resources. So meaning what they want to do may not be what they’re able to do. They may not get the financing on something that they desire to do because it might require more money down. you ⁓ know, an Airbnb, like you said, it’s going to require that daily or even sometimes, you know, weekly, depending upon the stay of, you know, the cleanup and

  or they’d have to hire a management company to do that piece of it. So we could definitely connect them to management companies and introduce them, but their fees involved. So that will reduce on their income. And so I think it’s really, you know, talking to each and every person as they come in and finding out what are their desires and then what are their

  What is their ability so that we can discover, you know, you might want to buy an Airbnb, but you need more money down. You don’t even own a home yet. So let’s first start you with buying a multifamily and you moving into one side. There’s a lot less money down. You can rent out the other side and then you can become a real estate investor. That could be your first step. If you have ⁓ less money to put down.

  Dylan Silver (23:05)
  side.

  Kathy Vasel (23:18)
  versus just trying to jump in as a real estate investor doing an Airbnb. And then they could grow into that next step. They could go and buy another property and move out of that multi-unit. there’s different, I think the interviewing of the client and finding out what their desires and what their ability is is really what the best avenue is in my opinion.

  Dylan Silver (23:43)
  Yeah, yeah, I think there’s so many ways for folks to get into real estate and it doesn’t have to involve you swinging a hammer. If you don’t love the idea of evictions, then maybe that might not be the avenue for you to do. You might, on the other hand, love being a passive investor as part of a fund or something along the sort of this. But I do want to ask you about scaling a business as a loan officer.

  Kathy Vasel (23:56)
  Exactly.

  Dylan Silver (24:13)
  And then also, too, you you’ve been in the business for several market cycles, right? So folks who joined in 2020, you mentioned they’re out of the business now, but folks who were in earlier, they’ve seen some trials as well. What’s your perspective on how, you know, folks who may be newer loan officers can weather different markets? And then also, do you have any advice for how they can scale their business even in times like

  Kathy Vasel (24:41)
  Mm-hmm.

  They have to be able to be like a leprechaun and just go with what the market is bearing. So, you know, when I first got in the business, it was extremely tough as well, but we were all about doing short sales. People didn’t have equity in their homes to be selling them. So I had, and I fortunately knew about short sales because I was a real estate investor. And, but it is that they just have to learn whatever is, you know,

  going on in the market in their area and adjust to that. For example, I’m learning all about chat GPT and AI and I’m not like in my 20s, but I am adjusting to learning about it because I know these younger lenders, they know chat GPT and AI and can adjust to that more easily. So it’s basically.

  Learning their craft and adjusting to the markets and knowing their direct market and their location is going to be different than another market in another state.

  Dylan Silver (25:53)
  That’s

  Yeah, I mean, look, if I compared, you know, the entry cost of a new homes in Dallas, Texas to northern New Jersey, where I’m at right now, or to, you know, the greater Boston area, we’re talking about three totally different entities, three totally different worlds. But at the same point in time, you need to have not just that local knowledge of, hey, here’s the assistance programs that are available, but you also

  Kathy Vasel (26:10)
  Mm-hmm

  Dylan Silver (26:22)
  I would imagine it helps to know the trends and people oftentimes say, well, this is what the realtor does, this is what the lender does. But in my mind, especially having the interactions that I’ve had with some really good lenders, a lot of the lenders are really thinking like realtors as well, knowing the areas, having a vested interest in seeing the growth and the production of these areas as well. So, mean, a good lender is invaluable.

  Kathy Vasel (26:49)
  Exactly. agree. Yeah, one of the things that I do when I get a client pre-approved, I take them through a PowerPoint presentation and I’ll show them what’s going on in the market because when they make an offer, if they don’t, if they haven’t made any offers and they start making offers and they’re not aware of what’s going on, they’re never going to win an offer. They’re just going to be out beat.

  Dylan Silver (27:13)
  Yeah,

  ⁓ that’s a real thing. I I’ll tell you what ⁓ my team, my real estate team told me this week is you have to prep clients that if we’re listing the home right now, let’s have some reasonable expectations. We have to treat every offer as if this is the only offer that we’re gonna get. And so if you’re not telling that to your clients in Texas, hey, this might.

  these two offers if we get two, these might be the only two, you’re really doing folks a disservice. Yeah, it feels good to get that listing, but if you’re not prepping them for the reality of the market right now, then it’s not just gonna be unfavorable to them, it’ll be unfavorable to you, because then at the end, they’ll be upset with you. You might as well have not gotten that listing at all.

  Kathy Vasel (28:00)
  Exactly. I agree with that. again, this is what you said, a good lender comes in play because the lender is going to explain that also to the client that for the buyers. So when they make an offer, ⁓ they can help them win the offer, but they might have the seller as well, knowing, you know, this is how we can structure your future purchase as you’re moving out of the home that you’re selling.

  And this would be your bare bone minimum price that you can take so that you can get to your next journey.

  Dylan Silver (28:39)
  I want to ask you, and without giving away all the gold, Kathy, because this is really, I’d say, a helpful conversation for lot of buyers. How can a good lender make an offer which could help facilitate that deal? Because I’m thinking of someone who might not know how that would work. I’m thinking, well, I could get a lender. I’m approved. I could get approved from another lender. How is the lender going to advocate for me? Isn’t that the job of my realtor?

  explain to our audience what a lender can do to facilitate a deal.

  Kathy Vasel (29:09)
  Sure. So I work with my realtors to help get the deals or the offers accepted. I call the listing agents. I guarantee my pre-approvals. When I guarantee them, do have everything that I need to get the offer accepted. And I am asking the listing agent where we are in the mix of the offers. And so if we need to tweak the offer, if the listing agent is

  giving us any information, I’ll go back and tell the buyer’s agent and the buyers so that they can tweak their offer if they choose to. So that’s one way. But the other way is I literally had an offer accepted and the listing agent wanted to know why my buyer wasn’t putting down more money because she knew she could have because she was qualified for more. And I said, well, she chose not to put down more money.

  because she’s going to be using that for any upgrades or repairs. And so just explaining that information to the listing agent, it’s helping them understand what the scenario is and makes them more comfortable to accept the offer. So that’s how I basically get it accepted. when I guarantee my pre-approval, it makes them feel a lot more comfortable knowing that

  Dylan Silver (30:25)
  Yeah.

  Kathy Vasel (30:35)
  I have all recent documentation and I get 90 % of my offers accepted with what I call a good offer. And a good offer is defined to me as an offer that you’re working with your buyer agent to put the offer in at a certain price with certain terms. And so for example, if the buyer thinks they should offer 600,000 for the property with

  Dylan Silver (30:57)
  Yeah.

  Kathy Vasel (31:05)
  without an appraisal gap guarantee and the buyer agent thinks that you should offer $620,000 with an appraisal gap guarantee. I don’t call that a good offer if the buyer is not going to listen to the buyer agent.

  Dylan Silver (31:18)
  That’s right. I mean, I can’t tell you, Kathy, how many times in a different segment of real estate, I was working with fix and flippers and the distressed property segment in Texas, I would have a property under contract. This is me ⁓ pre getting a real estate license. I was a wholesale at this point in time. I would have a property under contract and I would want to speak with the buyer’s lender. I would say, look, I hear what you’re saying. I like you.

  Kathy Vasel (31:39)
  Okay.

  Dylan Silver (31:48)
  You know, I don’t have any issue with what you’re telling me, but I want to be able to speak with your lender because I don’t want something last minute to come up a week before a close or a couple days before a close, especially because in this space, it was high stakes like this person could be losing their home. They might need to move imminently. There was there was a reason why they were opting for a cash offer versus something else. And it’s interesting because there was a lot of resistance in many cases. I don’t want you to talk to my lender. this and this.

  Kathy Vasel (32:09)
  Mm-hmm.

  Dylan Silver (32:16)
  or the lender doesn’t do this and this. so hearing you explain, hey, I call the listing agent to me as someone who’s worked with sellers and worked a lot with buyers and lenders, it is a no brainer. Of course, that’s gonna make a big difference. Because imagine I’m the listing agent and I’m the person selling my home and I find out not only did this person submit an offer, their lender called us directly.

  and explained to us, you know, this is exactly what’s happening. This is a serious offer. We should, you know, take a lot of consideration into this.

  Kathy Vasel (32:52)
  Right, and like I said, lenders can’t give any personal information, but we can give general information. Like I say, they’re a slam dunk. We have all the documents, so that’s very helpful. Additionally, if we can close loans in 16 days, so that’s very appealing, especially if you’re a real estate investor selling the property, time is money. You want that closed as soon as possible.

  That’s another advantage. ⁓ I mean, really for anybody. But if you’re a real estate investor selling a property, 16 days is as fast as cash almost.

  Dylan Silver (33:30)
  Yeah, I mean, that’s pretty impressive. ⁓ Kathy, we are coming up on time here though. Where can folks go to reach out to you? Maybe they are interested in purchasing a home for themselves or investment property. Maybe they are a loan officer themselves and would like some feedback based on your career. How can folks reach out to you?

  Kathy Vasel (33:36)
  Okay.

  Absolutely.

  The best way is through my phone. So 978-502-2998. They can also Google me. It’s Kathy with a K and then it’s Vasel V as in Victor A S E L. But the best way is really my cell phone.

  Dylan Silver (34:08)
  Kathy thank you so much for coming on the show here today.

  Kathy Vasel (34:11)
  Thank you very much. was a pleasure. It was really nice meeting you and talking to you.