How This 30-Year Credit Line Beats Traditional Mortgages for Smart Real Estate Investors

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In this conversation, Ron Bork NMLS ID 55343, a seasoned mortgage expert with four decades of experience, shares insights into the mortgage industry, market shifts, and the innovative all-in-one loan product. He emphasizes the importance of maintaining a strong database of contacts, understanding market cycles, and leveraging equity in properties. The discussion also highlights the advantages of the all-in-one loan compared to traditional mortgages, particularly for real estate investors looking to optimize their financial strategies.

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Ron Bork (00:00)
Going back to what you just asked me too, like what I learned, 2010 taught me to never ever again be without having access to the equity in my properties. I will never be in that situation again. ⁓ Our income fell so much that we literally could not qualify to refinance the amount of debt that we had on the house.

for any type of a mortgage, it just wasn’t

Dylan Silver (02:02)
folks, welcome back to the show. Today’s guest, Ron Bork with CMG Home Loans. Ron’s based out of the Tampa area, brings four decades of experience helping people with their mortgage needs, and is currently working a lot with buy and hold investors, including with an all-in-one loan product, which we’ll be talking about here today. Ron, welcome to the show.

Ron Bork (02:24)
Nice to meet you Dylan and thanks for having me.

Dylan Silver (02:28)
It’s great to have you on here. We were talking a bit before hopping onto the podcast about a number of things. I’m very interested in helping our audience learn about this all-in-one loan product. But before we get into that, I do want to ask you how you got into real estate. How’d you get into real estate?

Ron Bork (02:46)
Well, that goes back a long, long time. ⁓ I like to joke about it

you know, when I got into mortgages really, ⁓ and I did start actually with real estate, did real estate for one year. I remember I put 20,000 miles on my car. didn’t sell a single home. And then somebody introduced me to the mortgage business. Maybe you’d do better at the mortgage business. And that was not even Ronald Reagan’s second term. That was Ronald Reagan’s first term. So that’s how long I’ve been doing this business. Kind of crazy when I think about it, but.

You know, I just

that the mortgage industry ⁓ was a lot more just kind of transactional rather than like real estate I saw like you got to hold people’s hands for a long period of time You’re working with them potentially six months 12 months and I saw mortgages is very you know, it’s a tight little window you got an opportunity to ⁓ Sell them on your services and you know you get them then or you don’t get them and and then you move on And I kind of like that

part of it. also the math just kind of rings true with me. There are certain things, the way the numbers work, that kind of just speak to me. I like working with the numbers.

Dylan Silver (03:57)
I want to ask you specifically about pivots you’ve seen over the years. When we talk about four decades in the mortgage space, there’s been so many different trends and you’ve seen everything. When people think this is the worst thing that’s happened, COVID 2008, you have some perspective when you’ve seen it all. What’s your advice for folks who may be starting out either as mortgage brokers, as agents, and they’re thinking about

a career out of this? How can people really, you know, stay in the game for not just five years but in a downturn over five, ten, fifteen, twenty years?

Ron Bork (04:38)
Yeah, well, that’s a good question. Sometimes I’ve been asked, what’s the secret of my success? And I just say longevity. I’ve been doing it for so long that if I’m not good at it by now, I’m an idiot, right? no, one of the things that I always look back on that I made a big mistake doing, and that was not keeping a really good database.

⁓ I only really started keeping a database maybe six, seven years ago and I think about decades of people that I could be staying in touch with that I haven’t been able to. So anybody starting out, just every contact, and it’s probably kind of, you know, simple to say this, but just you got to retain your contacts, keep notes on them, when are their birthdays, things of this nature. That becomes your audience.

the bigger you can make an audience for yourself, I think the more success you’ll have in the future. So I think that’s a big thing that I’ve learned. And also, you you look at different things where the market is very, not volatile, but it definitely goes in cycles. And so, you know, I’ve had periods of time where, you know, money was a little tight.

Dylan Silver (06:39)
Yeah.

Ron Bork (06:45)
You know, I mean, especially going back to 2009 and 10 and the credit implosion and all that, that absolutely changed my life that time. And quite frankly, what I do today is a direct offshoot from my wife and I almost losing our house, losing pretty much everything. We owned a mortgage company back then. We were using a HELOC just to keep the doors open on our mortgage company. We lost

25 loan officers in a matter of a couple of months ⁓ It was incredible that period of time ⁓ I learned a lot of lessons I will say and so with cycles, you know when you have a big audience that you can reach out to it kind of levels out those cycles You know, you got these loan officers that they make a ton of money when the refinances are happening

Dylan Silver (07:43)
Right.

Ron Bork (07:43)
and they make very little when there aren’t. And that’s not good way to operate your business, right? So always be creating your audience.

Dylan Silver (07:53)
I do want to ask you about that time period because I’ve had so many guests on the show who will mention, you know, there were people really making money hand over fist in the mortgage space and throughout the country pre 2008. And then it was like the gate gets shut. You know, the lights go off and you see so many people who may have had cars, multiple homes, all the fancy things. And now, you know, they’re losing everything. It feels like.

Not to say that that couldn’t happen again, it probably would be a little bit harder now post Dodd-Frank, but for folks who are looking at scaling a business in the mortgage space, is there anything that you would tell them what to do or not to do to avoid that, or is it almost inevitable when there’s gonna be market shifts?

Ron Bork (08:42)
Yeah, market shifts are inevitable. They will happen at all times and you kind of got to get when the getting is good, you know, but if you have money when the market takes a plunge and then you can go in, you just think about it like if you bought houses in 2010, 2011, if you still have them, you’re probably a millionaire now. And so again, it comes back to longevity how long you do something, right? But if you could buy a

assets that you know pay for themselves. They don’t even have to generate income. As long as they can cover their own nut, it will appreciate over time. Even where we are, we’re so high, but I would be really shocked if values weren’t even higher in five to ten years.

Dylan Silver (09:31)
Yeah,

you know, I think the buy and hold strategy, no one that I’ve had in the park says, yeah, man, I really wish I hadn’t held that property that I bought in, you know, 2000. No one, it’s the opposite. I do want to pivot here, Ron, and ask you about this all in one product. And, you know, we were talking before the show about how people don’t even know, I wasn’t aware that this was an opportunity for folks.

Ron Bork (09:39)
Hey.

Yeah.

Yeah,

yeah.

Going back to what you just asked me too, like what I learned, 2010 taught me to never ever again be without having access to the equity in my properties. I will never be in that situation again. ⁓ Our income fell so much that we literally could not qualify to refinance the amount of debt that we had on the house.

for any type of a mortgage, it just wasn’t

So I’m like, I’m never gonna be in that situation again. So right away you think in terms of a HELOC, right? I think everybody pretty much knows what a HELOC is. It’s typically an open-ended credit line that you could put money in and you could pull money out. The thing is, most people don’t know how to properly utilize a credit line. They don’t recognize the fact that they could push

all their money into that credit line to dramatically lower their interest rate, ⁓ interest charges, and pay it off super, super fast, knowing that every penny they put in there, if they need it or they want it, they can take it back out. And so the all-in-one loan that I work with utilizes an open-ended credit line mortgage as your first mortgage on a property and

It is tied with a checking account. Okay? And the two accounts work together in the background. There’s no management whatsoever once it’s set up. And the set up just means, ideally, you’d like your direct deposits or any income going into that checking account. The same day that the checking account receives it, it hands it over to the credit line. We call that a sweep. So it gets swept over to the credit line. Now the credit line…

to calculate its interest charges uses a daily balance. So literally, it’ll take the interest rate on the loan, divide that interest rate by 365 days. So that’s your daily interest rate. And that is applied to the balance at the end of each night. So the sooner I can put money into that loan or into that balance, the balance would be lower and therefore my interest charges will be lower.

So what the loan does, and that’s why we call it an all-in-one loan, it combines checking, savings, and your mortgage into one loan product that you can now pay down really, really rapidly by using all your cash, or some of your cash, most of your cash. It’s really up to you. ⁓ For investors, if they have a rental property, they get their rent in the beginning of the month.

That’s helpful. I’m gonna get my rent. I’m gonna deposit into the checking account. That very night, it gets swept over to the line of credit. Now the line of credit being open-ended means that when the checking account needs money because you paid a bill, it’ll just pull it from the line of credit like a big fat overdraft account. And so it just keeps working like that for, in most cases, this loan stays open and available to you for 30 years. So that means you have access to some

Dylan Silver (13:28)
Yeah.

Ron Bork (13:52)
of your equity in your property for a 30 year period, which is pretty incredible.

Dylan Silver (13:57)
So how quickly are people typically paying these off?

Ron Bork (14:03)
⁓ company-wide and we do a ton of this business ⁓ CMG Home Loans is a very large company we have over 2,000 loan officers it’s not a small company so we do I don’t know the exact number but I’m sure we’ve done over a billion dollars of this loan and a company-wide we they get paid off in about 7.3 years but I’ve had people pay off their loans in two to three years others will take longer because

they’re using the available credit to purchase other things, whether that be cars, vacations, down payments on other homes, rehabbing other homes. As you’re paying it down, you’re getting, it’s like a two for one, because for every dollar you put into it, now you’re saving a dollar of the interest on that dollar, and you’re creating a dollar of available credit. So you’re getting two advantages by putting money into this account.

Dylan Silver (14:58)
I want

to discuss differences for myself, but also for folks who may not be familiar with the difference between this, refinancing, also this between maybe a traditional HELOC. Can you break down some of those differences for us?

Ron Bork (15:54)
So, yeah, a typical HELOC is going to be in second position behind the first mortgage. ⁓ They require an interest charge and they typically will stay open as a credit line for 10 years. At the end of the 10th year, whatever your balance is, it’ll now amortize over the next 20. So that’s not a good position to be in. Now you’re just in another amortizing loan. You just created two payments for yourself, right?

So the all-in-one replaces both of those. It says, there’s no need to take a first mortgage. ⁓ You know, for what? What you think about how are these mortgages sold to us for a stable monthly payment? That’s the big sell. Okay, so my payment never changes. Well, I mean, I don’t really see how that is so popular. It’s been sold to us because it happens to be the most, probably the most

⁓ profitable banking product that lenders have. So they want you in that loan. Plus there’s a giant secondary market for those loans, Fannie Mae and Freddie Mac. So they know they could just sell those loans, boom, and you’d be done. This loan is different in that people really, first off, nobody refinances this loan. So that’s another thing with regular mortgages. They force you to refinance for three or four or five different variables, right?

Dylan Silver (17:02)
Yep.

Ron Bork (17:23)
you want a lower interest rate, rates have dropped, you want a lower interest rate. Or I’ve created enough available equity in my property now and so I want to do a cash out refinance. Or I paid enough that I want to refinance to a new 30 year loan to get a new lower monthly payment, right? So people are always refinancing these loans. What they’re not realizing is they’re starting the clock all over again. And the total interest paid, which is something lenders very rarely bring up, they don’t really want you to know the total interest that you’re going to pay over that period of time.

With the loan like this because you’re paying it off or can pay it off so rapidly it Tremendously reduces the total interest that you wind up paying for it. So why does it why are we sold on? I’m gonna get a mortgage at six and a half percent But I’m gonna take a thirty year so I could put money over here into my savings account. That’s gonna pay me three How does that make sense why not

Dylan Silver (18:22)
It

does.

Ron Bork (18:23)
pay off the six and a half as fast as possible so I have all my money to be able to be invested. That’s the better way to go, but it’s less profitable for lenders so that’s not the narrative. That’s not how we’re sold things. We’re sold on borrowing, go for the lowest interest rate and the lowest monthly payment. And what that does is it gives you the largest amount of total interest that you’re going to wind up paying. So this loan changes all of

Dylan Silver (18:52)
very interesting. There’s so many follow up questions and ways that I could go with this. We are coming up on time. I do want to ask you a question though. When you’re seeing folks look at this product versus some of the others that were mentioned, is there one specific reason, hey, I want to use it for investment? Do they like the ability for them to use it for multiple purposes? ⁓ Is it a lot of folks who are real estate investors? Is it a lot of folks who may? ⁓

not be real estate investors or is it a mix across the board?

Ron Bork (19:25)
It’s kind

of a mix. I probably, mean, most of my business is primary residence. And you know, for real estate investors, they want this on their primary residence because they want to pay down their house. They recognize, you know,

reducing the total interest that they’re going to pay is positive, but at the same time, they’re creating available credit. You know, I used mine in that way when COVID first hit, I recognized, you know, it wasn’t going to be harmful to real estate. It was very helpful. My son came to me, wanted to rent a house with a couple of buddies. I looked at how much available credit I had.

did the numbers, I reckon, you know, back of the napkin kind of thing, but I saw that I could pay, I could finance 100 % of the purchase price of that house, give them a reduced rent, right, because I’m not looking to make money off my son on a monthly basis. I was looking for the appreciation and some tax benefit. And over two years, that house appreciated greatly. It was in St. Petersburg, like we talked about earlier, and it did really, really good. Two years later, I sold it, made almost six figures on the flip.

And then when that sold off, when I sold that property in January of 2023, there was enough there that I not only paid off the other 75 % that I borrowed for that house, but I also paid off what was left on my house here. So I’ve been mortgage free. I shouldn’t say mortgage free. I should say payment free because I have hundreds of thousands of dollars in available credit and I am looking at real estate and things. I wanna utilize those funds. And that’s something that just…

goes away for people that get conventional mortgages. They don’t have those options. So this is kind of like a cash management tool that you could use on your primary, on a vacation home, or on your rental properties.

Dylan Silver (21:10)
That is incredible. If it was just in the primary, I would say that’s phenomenal. But the fact that you could use it on rental properties and take advantage of the equity there is outstanding. We are coming up on time here though, Ron. Where can folks go to reach out to you, to get in contact with you, to learn more about this product?

Ron Bork (21:27)
Yeah, so my website is MrHeloc, M-R-H-E-L-O-C dot com (mrheloc.com). And my calendar, if you ever want to book an appointment to just talk to me, I’m willing to talk to pretty much everybody. We do these loans in all 50 states. Only residential guys. You do have to have good credit, 700 credit score minimum. I like to say, like I said to you earlier, Dylan, that this is for people that are doing pretty well.

They just want to do better. It’s not for people living paycheck to paycheck. It’s not people with credit issues. You got a clean financial house and you just want to do better. This is awesome for you. So Mr. Heloc, you can get some more information on there, m-r-h-e-l-o-c.com. And my calendar is ron B-o-r-k dot info (ronbork.info). And there you’ll see my calendar and you can just book a call right there. I’m happy to talk to you.

Dylan Silver (22:23)
Ron,

thank you so much for coming on the show here today.

Ron Bork (22:26)
My pleasure, thanks for

having me, it was great.

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How This 30-Year Credit Line Beats Traditional Mortgages for Smart Real Estate Investors

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