Investing in Real Estate: Smart Financing Strategies

Christian (00:00.916)
Awesome. Hey everybody. Welcome back to the show. I am here with no other than Tony and I’m really excited to speak with you, Tony. Tony has been a mortgage officer and she currently works for Cardinal Financial and she has a lot of very interesting things that she would like to discuss with you guys on this podcast. So I’m really excited to dive in. without further ado, Tony, welcome to the show. How about you just share with the audience a little bit about yourself, your background, how you even got started.

Toni-Ann Fischetti (00:06.765)
Thank

Christian (00:30.398)
in the industry and just ultimately how you got here.

Toni-Ann Fischetti (00:33.857)
Yeah, cool. So my name is Toni Ann Fischetti. I’m a licensed mortgage banker with Cardinal Financial. I am personally licensed in New York, New Jersey, and Florida, but Cardinal is a nationwide bank, so we can write in all 50 states. I’ve been doing this my, it feels like my entire life. I’ve been doing it for 15 years outside of like, know, waitressing and bartending when I was a kid. This is really the only thing I’ve ever done.

professionally and it really landed in my lap. Like no one grows up and says I want to be a mortgage banker, but I was a single mom and the opportunity opened at a large national financial deposit institution that also does loans and they hired me as a

a branch banker, right? Opening checking accounts and that sort of thing. And you got like referral credits for referring to the professional services in the branch, the financial advisor and the loan officer. And I just really took to my relationship with the loan officer because it was an easy handoff. hey, your rates back then in 2010,

you know high rate was like five and a half like if you could get out of a five and a half and into something lower it was great so was just a soft introduction hey your rates pretty high why don’t you talk to our loan officer and i did that for about nine months before i realized i i can identify people’s needs and i can sell the deal so i transitioned into getting my license and not opening checking accounts and just writing mortgages

And it really was sink or swim, right? I got this baby at home, I gotta make this money and I need to learn my product, my trade and my craft to be successful. So I just became essentially a product expert and that’s where it all started.

Christian (02:50.028)
I love that. I love that. That’s the story right there. was almost like you said, sink or swim. There’s no other option that you have to make this happen. Right?

Toni-Ann Fischetti (02:56.683)
Correct, there was no other option, right? Because other than that, like I said, I was, was ray tracing, but you can’t really raise a family or sustained on that. had just gotten my undergrad and you’re like, well, now I need a big girl job. And this job at the bank opened and, and here we are, right? Still doing it all this time later.

Christian (03:21.088)
Love it. That’s incredible, Tony. Thanks so much for sharing. That’s awesome. So how about we talk a little bit about, you know, what are the biggest challenges, you know, first time home buyers face and you know, what, what kind of steps should they take to prepare financially before applying for a mortgage? Right? I know you work with first time home buyers, so what would you say about that?

Toni-Ann Fischetti (03:22.823)
Yeah

Toni-Ann Fischetti (03:39.442)
It’s a really difficult market for first time home buyers. We’re in a high rate environment. But I think the bigger push is inventory and affordability. There in my market where I live, there’s like 600 houses for sale. And we are, you know, our neighborhood, the part of New York City that I live in, there’s half a million people living here.

So there’s half a million residents, 600 houses for sale, super short on inventory. So we don’t have a lot of options to choose from because the inventory is not there and that just drives the prices up, right? That’s just how supply and demand works. So average home price in my area, we’re over $700,000. Yeah!

And there are a lot of metropolitan markets where that is the big barrier to entry, right? Home prices. San Francisco, I think the median home price is a million dollars.

Christian (04:48.534)
No big deal.

Toni-Ann Fischetti (04:51.537)
Right, and I’m in New York City and I understand that this is a lot of, I would say, transient in a way, right? Native New Yorkers who have been born here and lived here like I am, I’ve never lived anywhere but New York City in my whole life versus people that are coming in from other places. It’s really difficult for people that are residents of New York City and the surrounding

counties to achieve home ownership in this area because of the affordability.

Christian (05:28.524)
Wow. Wow. Do you see that for changing in the, you know, the near intermediate future? I mean, no. Wow. It’s you. Wow.

Toni-Ann Fischetti (05:30.472)
Yeah.

Toni-Ann Fischetti (05:36.262)
I don’t, right? New York City is the center of the universe. If you’re not from New York, you want to be from New York. So people are coming in from other places because there’s job opportunities. People are not leaving because our families are here. And that’s even with like departure market. A lot of people in other places, when they retire, they will go someplace warmer or more affordable or…

Christian (05:40.5)
Right. Yeah.

Mm-hmm.

Toni-Ann Fischetti (06:02.375)
Sometimes even back to the countries that they’ve come from, right, with that immigration and migration move. In New York, if you’re in, this is just anecdotal, right, if you’re a native New Yorker, you don’t leave. You’re here forever, right? A lot of people are, like, grow up in the houses that their parents grew up in, a lot of this multi-generational householding.

that’s going on, now maybe we wanna kinda leave the nest or we wanna buy something for ourselves. It’s just really hard, because the inventory isn’t there. No one’s leaving, and it’s really expensive.

Christian (06:39.436)
Wow, wow, that is something, Tony. It is unfortunate, right? I mean, it’s just not the same process as it was, you know, 30, 40 plus years ago. mean, yeah.

Toni-Ann Fischetti (06:47.879)
Not even a New York City like real estate trends there has never been a downward dip in New York City real estate so even in two thousand seven two thousand eight after the crash when the rest of the country was correcting twenty thirty forty percent on value. New York we didn’t shift that much maybe there was like a ten percent correction on home value.

And then we just picked right back up. We were not in a housing slump for a very long time. And just anecdotally, right, I bought my first house 12 years ago. I paid $315,000 for my house 12 years ago. And I thought that was a lot of money. That same house, if I were to buy it today, would be $650,000. Right, it doubled in 12 years, whereas

Christian (07:41.196)
doubled.

Toni-Ann Fischetti (07:45.327)
Traditionally, you see home values doubling every 20 years. In my market, it is doubling at a really rapid pace. So if you’re looking to, if you’re in New York, right, and you want to buy in five boroughs or those surrounding counties and commuter cities in New Jersey, the home price is all, they’re just not going down. They have not gone down. There is no market indicator. My crystal ball is telling me that they are just going to continue to trend up. That’s just.

That’s just what this market is.

Christian (08:16.556)
Wow, that’s insane. It really is. And like you said, I really don’t foresee it changing either. I mean, this is currently where the market is and that’s just where it’s at, right? I mean, there’s really no changing it. So let’s talk.

Toni-Ann Fischetti (08:28.3)
Right. And there are places where development is happening. Texas and Florida, I think, are kind leading the way with new home development, the number one destination for new home purchases, because a lot of people are leaving the bigger cities and kind of heading out. Affordability is an issue.

Christian (08:43.605)
Exactly.

Christian (08:48.012)
Well, let’s talk about that too, Tony, because I know you are licensed in multiple states, right? So you definitely have a lot of flexibility to help people with those opportunities in those states. So let’s talk about some creative loan options, right, available for buyers with maybe less than perfect credit. What kind of steps can they take to improve their credit score when purchasing a home?

Toni-Ann Fischetti (08:52.255)
Mm-hmm.

Toni-Ann Fischetti (09:10.752)
Surprisingly, I don’t really focus on the credit improvement portion of it because FHA has some of the most flexible FICO options that there is, right? So FHA is like the gold standard of first-time homebuyer loan products, but you do not need to be a first-time homebuyer to take advantage of an FHA product. It allows you minimum down payment, 3.5%.

across all property types. And their FICO requirements are generous. So they’ll go as low as 510 on a FICO score. You need to put 10 % down, that’s the caveat, the push and pull. But to take advantage of the 3.5 % down payment, you need a 580 FICO score, which is very achievable.

Christian (10:02.582)
Mm.

Toni-Ann Fischetti (10:07.359)
Even people with below 580 credit, there are ways to get you up to 580. I have access to credit programs that essentially I will ask it, hey, my client’s at 510, what do they need to do to get to 580? And they’ll review the credit report and say, hey, they need to pay down A, B, C, and D to X, Y, and Z, and the credit will lift. Because credit is like a transient thing, right?

It’s not static. The score will change depending on your credit usage, the time of month that you pulled it. So even if you think you’re having credit challenges, you’re probably not, right? It’s not as bad as you think it is.

Christian (10:54.068)
I 100 % agree and this is the importance of working with an expert like yourself, right? Someone that obviously knows the process, someone that can walk you through A to Z. I’m like, hey, these are the steps we need to take to improve so we can get you in the door, right? And that’s ultimately what it is, right? So anybody that’s listening to this, definitely reach out. I mean, that’s a great resource to have right

Toni-Ann Fischetti (11:13.215)
For sure, because a lot of people think that they’re precluded from homeownership. because my credit’s in the 500s. Or some people even, my credit’s in the 600s. It’s not that good. It’s good. It’s good enough to get you.

Christian (11:26.826)
Yep. And they never make the jump and then they’ll forever rent. And it’s like, you’re missing out on opportunities to really build equity and real time long-term wealth. Right. And it’s, you don’t know what you don’t know is what I like to say. Right. So.

Toni-Ann Fischetti (11:39.583)
100%. My manager says that. I like that one too. You don’t know what you don’t know. Just sit down with a professional, a lender that you know and trust, someone maybe that came referred, who will take the time and kind of educate you on what you need to do. There’s a lot of lenders out there that will just see, a 510 FICO, a 490 FICO, or something that just kind of doesn’t.

Christian (11:42.355)
Yep.

Toni-Ann Fischetti (12:05.513)
qualify at the time and say sorry Christian you don’t qualify Come back next year. I will take the time to educate you to let you know what you need to do to qualify So maybe we’re not buying a house now in the next 30 to 60 days But we can absolutely buy a house in the next four to eight months six to twelve months and as long as we kind of get on a plan and partner with it your gold

Christian (12:23.18)
There you go.

Christian (12:30.924)
I love that, right? But the only way to start is to have a plan in place, right? To really get that going and get the wheels turning. Thanks, Tony. I appreciate you sharing that. So let’s talk about, know, cause I know you work with, you know, real estate investors as well, people that are looking to invest in real estate. So, I mean, let’s talk about some of the, you know, the best financing options that, you work with. How can investors get started, you know, with minimal capital, right? Cause we were just talking about, you know, some people just, they never really start.

because they let either fear get in the way or they just simply just don’t know how they don’t have the knowledge. So how about you talk a little bit about that.

Toni-Ann Fischetti (13:05.896)
Yeah, there’s a lot of different investor loan products. Not all banks have them, but they’re absolutely out there. I will say just as a blanket, there’s no way to kind of get into real estate investing without some capital outlay. That’s just the cost of doing business. Everyone needs to have some skin in the game. We can get really creative.

with how we qualify you based on income. There’s debt service coverage ratio loans, DSCR, where basically we’re qualifying you, the buyer, not based on your income assets or credit like we would on a regular residential mortgage, but on the cash flow of the property. As long as the rent rule covers your mortgage payment, we’ll write it.

Christian (13:59.37)
Wow. Wow. Yeah.

Toni-Ann Fischetti (14:00.337)
Right? Yeah. So you need to have a minimum down payment and it’s 20 % and that’s pretty much all investment products anyway, right? Investors, it’s a riskier product. So the lender wants to see that you have more skin in the game. And that’s how you kind of get to it. A lot of people don’t realize there’s other ways to leverage that money, especially if you already own a home.

Christian (14:16.012)
Mmm.

Toni-Ann Fischetti (14:30.597)
You can leverage the equity in your primary residence to now have the capital to make an investment in another property. And it’s really abstract. People sometimes don’t want to touch their primary residence. They’re like, well, this is where I live and this is the equity that I’ve earned. I’m going to keep it buried in the ground. But every entrepreneur and business person will tell you, you got to leverage, right? You got to leverage credit.

Christian (14:40.236)
Mmm.

Toni-Ann Fischetti (15:00.316)
to reinvest and make money. And it doesn’t really matter whether you’ve pulled it out of your primary residence. Let’s say you have a first mortgage for $400,000 and we’ve pulled out $100,000 in equity to kickstart our investment. Now we have $500,000 in outstanding loans. It doesn’t matter that it’s $500,000 on one property or four and one.

Christian (15:16.812)
Mmm.

Toni-Ann Fischetti (15:29.723)
It’s still half a million dollars worth of loans.

And now you’re able to kind of leverage that equity and purchase another property that will hopefully cashflow for you.

Christian (15:43.03)
Wow, wow, there’s a lot of tricks to that trade it sounds like, right? But it just sounds like there’s so many opportunities.

Toni-Ann Fischetti (15:47.546)
Yeah, listen, it absolutely has some risk involved in it. Especially if you’re a first time investor, think that that is a big barrier to entry the fear, especially if you’re investing in a place that you don’t live in. Like again, in New York, it’s very hard to cash flow in New York because of the the cost of real estate.

Christian (15:53.462)
Sure.

Toni-Ann Fischetti (16:13.336)
And New York City in particular is not a very landlord friendly place. So a lot of people are hesitant to invest here because it’s, it’s hard to kind of get rid of your tenants if you, if you need to. but you can take that same money and invest in them. And a much more affordable market, but I don’t live in the market where I’m investing. So it just requires a bigger team, right? You need a property manager.

Christian (16:18.528)
Mm-hmm.

Christian (16:27.371)
Right.

Toni-Ann Fischetti (16:42.33)
Who’s going to collect your rent? need a maintenance manager who’s going to handle the everyday, you know, my toilet doesn’t flush problems, but it’s absolutely manageable and doable. And now you have a portfolio of real estate. We have our primary residence that we live in. We have our first investment property. And then in two years, guess what? We can recycle our investment property, pull the equity out of that.

and buy the next one. like a lot.

Christian (17:14.655)
Right, exactly. They’re steps, right? And that’s the thing. And the biggest thing, it always circles back to where even we were talking about, It’s working with a professional that can educate you on these resources, right? And your options, right? And that’s the thing. Somebody that either has never done this before, they don’t start because they haven’t made the attempt to reach out to somebody. That can provide the answers for them, right? So this is invaluable information, Tony. It really is. I feel like it’s gonna help a lot of people.

Toni-Ann Fischetti (17:16.853)
They’re correct.

Toni-Ann Fischetti (17:42.594)
Yeah.

Yeah, I hope so.

Christian (17:46.38)
Awesome. So let’s talk about, you know, renovation loans, right? I know you, you do a lot of stuff with some renovation loans and financing on that. could you a little, could you explain how those work, right? How renovation loans work and how buyers can use those to, you know, turn a fixer upper into, you know, their dream home, right? They don’t want to buy a new construction house or a brand new build. You know, what are the best financing options for those, you know, looking to, you know, upgrade to a new home for a homeowner.

Toni-Ann Fischetti (18:13.75)
Yeah, and this is again true in my market in New York City. Trick. My catchphrase is buy the worst house in the best neighborhood. How renovation loan works is you are financing the cost of your home purchase plus the cost of the renovation into one mortgage loan. So for buying a house for $500,000.

Christian (18:25.686)
I like it.

Toni-Ann Fischetti (18:41.879)
but it needs $150,000 worth of repair. And I’ll circle back to that in a second, right? We’re writing one loan for 650. 500 goes to the seller and then $150,000 goes to your contractor to do the repairs.

Christian (18:49.184)
Yeah.

Toni-Ann Fischetti (19:01.43)
Um, and they don’t need to be major repairs, structural repairs. You can take out a renovation loan for something as small as I need new appliances, right? You can finance 20 or $30,000 for appliances. And sometimes that kind of is a make or break in, this market, right? We’re not finding what we, what we want or need.

Christian (19:19.062)
Wow.

Toni-Ann Fischetti (19:29.557)
already listed or complete, you pick up a fixer upper and even in my high price market, fixer uppers are absolutely selling below market value to accommodate for the repair that you need to make. And you could just finance the cost of it into one loan, right? You don’t have to worry about, well, I don’t have another $100,000 or even $20,000 to buy the appliances or to finish the floors. It’s one loan.

Christian (19:45.334)
Right.

Christian (20:00.588)
Wow. Wow.

Toni-Ann Fischetti (20:02.446)
Yeah. And yeah, and we’re getting another creative option is here, accessory dwelling units, which is an additional living space in your single family home. Like either you have a basement that has an apartment set up or like a roof raise, it’s called an accessory dwelling unit. You can finance

Christian (20:04.16)
That’s incredible. I didn’t even know that.

Christian (20:23.84)
Yeah.

Toni-Ann Fischetti (20:32.695)
The cost to construct an accessory dwelling unit as part of a renovation loan and now you’ve turned your single family into an income producing property with an ADU that’ll help offset your mortgage. A lot of people are doing that in my market in New York. one, cause they need the income.

Christian (20:39.702)
No kidding.

Toni-Ann Fischetti (21:00.932)
It’s an added help in a higher price market and a lot of people also have extended families that will be coming with them. So they’re financing the build out of a separate dwelling. It’s wild.

Christian (21:15.158)
Wow, guys, I hope you’re listening to this. mean, there’s a lot of ways to skin a cat in this game. And it just sounds like there’s just endless opportunities, Tony. And I mean, it just sounds like you’ve had so much experience for all these years being able to put these types of deals together and just really educate on that. I mean, that’s incredible. It really is.

Toni-Ann Fischetti (21:20.593)
Yeah.

Toni-Ann Fischetti (21:36.209)
Yeah, not a lot of people know that not a lot of officers will think outside the box like that. Yeah. Yeah.

Christian (21:39.456)
No.

I haven’t heard about these personally myself. I just haven’t. I didn’t know that about New York City either. That is something that is completely unheard of on my end. So that’s invaluable information, Tony. I really wish we had another hour to talk on this because I know you could do it with all the experience that you’ve spoken about, but fortunately we don’t. But Tony, thank you so much for joining us today and joining the show. And I’ll turn it back over to you if anyone wants to learn.

Toni-Ann Fischetti (21:54.529)
Now, where are you looking at?

Christian (22:11.872)
you know more about you and how they can work with you, why don’t you share a little bit about how they can reach you and how they can work with you.

Toni-Ann Fischetti (22:19.791)
You can find me online. have a personal landing page where you can just kind of click and say, give me a call. And you can follow me on Instagram where you can see all of my misadventures in motherhood and lending. My Insta is knowyourmortgagepro.

Christian (22:43.146)
Know your mortgage pro, I like it. Ladies and gentlemen, you heard it here first. You know exactly where to find Tony. Hope everyone enjoyed the show today. I know I sure did. I gained nothing but value from this and I know the audience as well, Tony. So again, thank you so much for your time. It is much appreciated.

Toni-Ann Fischetti (22:57.848)
Thank you so much for the opportunity. This is a lot of fun. Thank you.

Christian (23:01.64)
of course. Absolutely. Guys, again, I hope you enjoyed and as always, we’ll see you on the next episode. Take care, everybody.