Mortgage Loan Strategies That Help More Buyers and Investors Get Approved

Carmen Cipolone (00:00)
You know, one of the major things that you gotta focus on is having the why and having a plan. You know, those two having the plan, not necessarily knowing exactly what you’re gonna do, but just having the idea and the passion of what you want to provide to to help people that are looking for what you’re s— what what you’re selling. You know, when you have the determination, the grit And the willingness to help people without expecting things in return, magic does happen.

Dylan Silver (02:05)
Hey folks, welcome back to the show. Today we’re joined by Carmen Cipolone, a Florida-based branch manager and mortgage loan officer with The Simple Loan Group at Barrett Financial Group. He’s also a real estate investor with properties in multiple states, and he’s the owner of a successful fitness center, Hardcore Fitness, in San Diego, California. Carmen, thanks for joining us here today.

Carmen Cipolone (02:27)
Well, thanks for having me. I appreciate it.

Dylan Silver (02:31)
You’ve made several pivots, been involved in several different industries, started businesses. When we talk about starting and scaling successful businesses from the ground level, what does it take?

Carmen Cipolone (02:47)
You know, one of the major things that you gotta focus on is having the why and having a plan. You know, those two having the plan, not necessarily knowing exactly what you’re gonna do, but just having the idea and the passion of what you want to provide to to help people that are looking for what you’re s— what what you’re selling. You know, when you have the determination, the grit And the willingness to help people without expecting things in return, magic does happen. And when you focus on those those things besides have— besides just the money aspect of it, and you’re looking to put yourself out there to do it and willing to do as much as whatever it takes to get it done, you’re gonna see amazing things happen for your business and for the people that you serve.

Dylan Silver (03:41)
Now we’re big believers in this here, this go-giver mentality. Has this always been essential to you, you know, from the first business, or when did this idea start becoming something that was critical for you?

Carmen Cipolone (03:55)
Well, when I grew from childhood. When I gr— I grew up in a blue-collar town in South Jersey and my mom and dad are hard work— are hardworking people and they always told me to to do your best and work hard and to have a goal set and to focus on not what the— not what the next deal is, but focus on the relationship. It it— you know, you— you attract the bees with the honey, right? Sweet sugar. It— it goes a long way. If I’m always buckle enough against the system, the system’s not going to accept me. And they’re gonna win. Eventually they will remember and it will come back. You can fight and bully and push, but it— it’s not the way it is. And especially in today’s time, it’s very, very different. So I see that there’s a collaboration to be had with community instead of me trying to go in there and and tear it all up. And so the way of doing that is as an example, some of— some of your viewers will have heard of NIMBY: not in my backyard. And that’s a big deal. That can really mess with real estate investors. but there’s always— there’s always, Freddie, a way around where there’s the gray area. And the gray area is the magic. So if it’s not in my backyard, what do I have to do to say it’s okay to be here? Well, w— one part is I— I bought the whole block. So there wasn’t really like not in my backyard. Hands down. And across the street, I went and talked to all those folks that were going to be the neighbors and said, “Would you have a problem if I was to put in a men’s recovery house?” And— and I— I told them who I was, what I was doing, not like I’m special, but that I also had gone to the judges of Monmouth County and they’ve given me letters. I went to the chief of the fire station and— and they gave me a letter of like, “We support you.” And I went to the captain of the— the police, and, “We support you.” And I went to the CEO and the chairs of the different departments— like the emergency room and the psychiatric unit and the CEO of the hospital, and they gave me letters, right? And then I went to the EMTs because, you know, overdoses and things happened and I wanted them to know what I was doing. And— and they gave me letters. And then I— I backed it up with not only these letters, but I actually had a plan on how this was actually going to be benefiting the community and working with the community. I also went to the probation office office and and told them what I had going on and at that time it was called drug court. And everybody was like, “Yes, this would be really great.” And it’s an— it was a need. There was an absolute niche and a need. So in doing so, I didn’t come up with not in my backyard. Sure, there were some people who were very skeptical and nervous, but at the same point in time, I took my time to do a little research to find out what’s going on in the community, what’s needed, how this would react, how if I could get support. And I was able to get the support. So it wasn’t cramming it down their face and, you know, press and news and the big talk and show. It was more of an invitation. And I think anybody out there that if you’re invited, you have the opportunity to say yes or no, instead of it being an argument. So I highly, highly, highly recommend invitations. That’s just one example.

Dylan Silver (05:01)
When we talk about the current status of loan originators and lending in general, it feels like there’s not enough loan officers that are willing to go to the mat for their clients. And in many cases where people might be able to get approved or able to get that investment property, they leave thinking, “Well, I guess I’m have to wait, you know, another year, another year of tax returns.” Do you see this as well as someone who’s been in this space for a— a while? Do you see that there’s an— insufficient supply of loan officers who will go to the mat for their clients?

Carmen Cipolone (06:25)
Well, that’s the— one of the biggest things that I have to, you know, compete against in this business is the people that— the loan officers that are out there that are just about a paycheck, right? They want it now, they want to be instantly gratified, they want to get the deal done and they wanna move on to the next client. And previous banks that I’ve worked with, you know, it’s just— it— it— basically, just go after the people that are— are ready to go now and move on. Don’t even— so it’s— I feel bad for a lot of the clients because they don’t get a plan. They just get, “You’re denied. Thank you very much,” and then they just never hear from them again. Well, you need to be better than that in my business. So you need to be willing to speak with every single person that you— and have an honest conversation with them and give them the plan. It might not be right now. I have clients that I’ve spoken to many, many years ago that we’re still in contact with, you know, whether it be through social media or through a drip campaign of, you know, people that I’ve spoken with and they weren’t ready to go, their credit wasn’t where it needed to be. We give them a strategy and a plan. We— you know, it’s a year later, they are ready. And those are the best types of clients because they remember you, they like you, they come back to you because you gave them help and no one else did. If you’re not doing that, you’re missing out on a lot of opportunity and the guys like me that are out there are gonna be able to take advantage of that and of— of that market share to help these people out. And, you know, it’s the little things, really.

Dylan Silver (08:24)
It’s so critical being able to provide value up front for folks because if people are leading with being helpful and supportive, then it ends up being— being reciprocal down the line. You know, if someone is getting something essentially, you know, for free, they’re gonna feel a sense of gratitude for that down the line. And I think one of the things that we miss as loan officers and as realtors and as, you know, real estate professionals is realizing that it’s not necessarily going to be a win today, tomorrow, or even this year, but that these could have— these, you know, long-term effects. You’ve been in— in business now for years and you’ve seen different market cycles. how has that long-term and staying power helped you today?

Carmen Cipolone (09:13)
You know, you— you have to be always willing to change for the better and to understand what is going on in every market that you work in. I’m licensed in 14 different states. That’s 14 different mar— and then there’s markets within those states. So you gotta be up to date and knowing what is going on in each state and in— and in each market to give your expert advice.

Dylan Silver (09:34)
You’ve been active not just in one area but in several. You’ve mentioned fourteen different states. You’ve lived in New Jersey, San Diego, you’re now in Florida. When you look at these different markets and having moved, have you noticed different trends and how people approach even owning a home?

Carmen Cipolone (09:54)
I have, and to get back to what you— we were just speaking about, you know, we’re in a high interest rate market. I’ve been in the loan business since 2006 and the rates have gone very down very low into the twos all the way up into high— mid to high sevens. So depending upon what the person’s goals are, if they’re already homeowners, a huge amount of clientele aren’t needing to do any type of loan transactions if their interest rates at 2%. So, how do you help these people out? Well, that’s another question about their goals. Well, do you— are you looking into investment properties? Are you trying to get cash flow? Are you trying to build your portfolio? And so if they are and they don’t have the funds for the down payments that are required, then there’s avenues to go where we don’t need to touch their first mortgage. They— they have a lot of debt equity sitting in their home. Values are going up and down all the time. So when I’m speaking to them, I’m— I’m— I’m saying, “Okay, well, you have a lot of equity in the house today. What are you doing with that— with that money?” “Well, I’m not going to do anything with the money. I’m just going to let it— let it ride and hope the values continue to go up.” “But I do want to buy an investment house, but I just don’t have the funds to do it.” “But I don’t want to touch your f— my first mortgage.” “Well, that’s okay. Well, we have second mortgages or home equity lines of credit or home equity loans that we could use to bridge that gap to give you the funds that you need so that you can start cash flowing on these investments. If you don’t do anything, that’s fine as well. But values do go down.” And say that you have $100,000 in equity now that you could use the bu— to purchase these investment properties for yourself for what your goals are, and you don’t jump on it. Six months from now, the market could turn, and that $100,000 equity could be down to $25,000, it could be down to, you know, nothing. So you lose that debt equity. Might as well use it for you. The whole point of having assets is to have it build your— your— your net worth and to continue to create. So I go into strategies like that when it comes to different ways that we can bridge the gaps with different areas of the country. There’s— I have a lot of people in San Diego that don’t— they just can’t afford buying property in San Diego. But then so then I speak about the different markets that we have. Florida is a is— is— is a major market for investments. obviously there are some pro— issues with Florida with the homeowners’ insurances being higher because of the hurricanes and things of that nature. But if you find a great deal and it pencils out and you’re making money on the investment, you know, that might be an opportunity for you. And if you are living in San Diego, which I’ve done, then you hire competent property managers that you trust that are going to look over the property and collect the rents and to let you know if there’s any type of repairs that are needed. You know, it just really depends.

Dylan Silver (13:29)
talk about gaining access to the equity in your home. If you’re in an area like San Diego, I can imagine if you’ve owned your home for a while, even if you still owe on it, there’s gonna be a substantial amount of equity in many of those cases there. Are people aware that they have the ability to access it through a HELOC, or in some cases— are many cases are you presenting that to them and they’re becoming aware of it through that conversation?

Carmen Cipolone (13:55)
You know, home equity lines of credit aren’t the easiest. Well, I should— I should say in prior years past, it’s not been always the easiest type of a— of a product to get, because a lot of times it was only being given now by credit unions and the major banks that have really strict guidelines. It’s a very risky product because it is in second position on a l— on a— on a title. And if a client were to not make payments on their— on their mortgage, that second lien will only get paid out after the first mortgage gets paid. So a lot of people have tried— typically they were back in the day they want your credit scores to be over seven hundred. They want you to have excellent credit. They don’t want to have any late payments where, you know, we would love for everybody to have that situation, but unfortunately the real world s— life is that people sometimes make mistakes or they’re in situations that they can’t control. Now that these other products are opening up on a wider scale, I’m able to help these people with credit scores in the 620s and opening up avenues for them to look at that option. So it’s definitely a— conversation starter because not every, you know, 95% of the people out here don’t want to touch their first mortgage. They love bragging about it around the water cooler with their buddies at work about their two-and-a-half or three percent interest rate. But if somebody has fifty thousand dollars in credit card debt that are ch— and they’re paying— they’re charging twenty percent interest or more on it and they have no money in the bank, they’re a hot water heater breaking away from, you know, being in a really bad situation. So we gotta look at that. That’s— you know, having that expert conversation with me where we consult and we look at everything, we break it all down. It’s not just the interest rate on a mortgage, it’s all— it’s the whole financial plan that you have. And if we’re able to consolidate all that debt into one loan and the refinance on the ca— on a cash-out refinance makes the most sense, yeah, they give up the two percent, but they’re cutting out twenty percent of, you know, not— interest that you can’t write off with credit cards and saving themselves anywhere from a thousand to a couple thousand dollars a month by getting— clearing all that debt, which will then increase their credit scores. And instead of paying when you— when you combine all the interest that they’re paying, that two percent is minimal compared to all the other interest that they’re paying. And if their interest— if the new mortgage turns into a five or six or seven percent rate, you know, it— it’s still a lot better than having these high-interest credit debts that a lot of people have.

Dylan Silver (17:18)
Now you’re also active with investors and folks who are looking for investor loans to purchase property. there’s new ways and creative ways that I’ve seen people get into these investment properties. And then there’s also products that have been around for a long time but seem to be more popular now than ever. DSCR, for instance, bank statement loans. what are you seeing right now in the investor loan space and, you know, what areas are you seeing headwinds behind?

Carmen Cipolone (17:50)
You hit it right— you hit it right— you hit the nail right on the head with the the debt service coverage ratio loans. DSCR has been huge over the last couple years. They were few and far between five, ten years ago. No one really ever heard about them. So when you bring— and there’s still a lot of people to this day that have no idea what we’re talking about until we explain it. A lot of people think that the only way to get a mortgage is if they qualify with their— their income with their current job Or with their tax returns if they’re self-employed. And the majority of people that are self-employed don’t show any money on their tax returns. They have a lot of write-offs, they have a lot of expenses, so that the taxable income at the end of the year is very little, which is so that they pay less tax. So that cuts out a lot of loan products for these types of people. But with the DSCR investor loans, we don’t look at tax returns. As long as you have pretty decent credit and no late payments on the mortgage, we let the investment property, the estimated rents, qualify these investors to buy the property. So that is one of the biggest, you know, benefit— benefits for people that are just strictly investors. They don’t have any other— all they have is their portfolio where they can— it as long as they have the twenty percent or fifteen, there— there are some options at fifteen percent these days, where as long as the numbers pencil out and the ratios are one or— or better, then they’re gonna get premium pricing. I mean, I have lenders that I work with that you don’t even need one percent— the one point, you can go below that. And obviously, with— if the rents aren’t covering the full mortgage, it’s going to be a riskier loan for the— for the bank, but it still can get done if the down payment is there. So that’s one of the huge ones that we have. Obviously, the bank statement loans that you were speaking of are— are— are— are also huge for self-employed people that write everything off. They don’t get the normal W-2 or pay stubs from a— from a— from an outside source of employment. So if they don’t show any income on their tax returns, then we would just use the last 12 months of their business bank statements And add up their deposits and we can get them qualified through there. So, you know, there’s a full menu of loan programs out there. People just think that there’s only a few out there, and some people still think that they need 20% to buy their own— buy a home for owner-occupied, which is another, you know, false situation these days. I mean, if conventional loans, first-time home buyers, you can do 3% down. There’s down payment assistance that covers that as well if you qualify. If they’re veterans, the 0% financing, the USDA loans that qualify in the rural areas are zero percent. So I’m a big believer in getting out of the rent and the— the, you know, the rent rat race and start look— you know, paying your own mortgage instead of the landlord’s. And, you know, there’s just a lot of people that just don’t think that they’ll qualify and they’re scared to have their credit ran, they’re scared to get anything checked out. Well, I don’t need to do a hard credit pull to figure out what their situation is. I don’t need to ding their credit to see what their— what their— what their, you know, whole profile looks like. With my clients, I do just one soft inquiry with Experian to see what their scores are. It’s— there’s no hit on their credit. I don’t charge them for that. And that gives us, you know, the meat and potatoes that we need to see if there is going to be an opportunity for them to get the financing for the real estate.

Dylan Silver (21:27)
You know, when folks are borderline and, you know, if they may be able to qualify, there may be a way for them to go, they may have to wait another year, they may have to work on credit or, you know, reserves, any number of things, that’s sometimes a tough spot to be in. And I— I’ve seen it sometimes, you— you— you fall off with the lender, you stop hearing from the lender, you reach out and you’re— you’re not a priority, you know. What can lenders do in order to keep those people who may be a year out, you know, year and a half, two years out from buying a home, top of mind?

Carmen Cipolone (22:02)
Well, that’s one of the biggest things, Dylan, in regards to my world is that there’s so many— loan officers out there that are just looking for the low-lying fruit. They want it now, they want to be instantly gratified, they want to get the deal done and they wanna move on to the next client. And previous banks that I’ve worked with, you know, it’s just— it— it— basically, just go after the people that are— are ready to go now and move on. Don’t even— so it’s— I feel bad for a lot of the clients because they don’t get a plan. They just get, “You’re denied. Thank you very much,” and then they just never hear from them again. Well, you need to be better than that in my business. So you need to be willing to speak with every single person that you— and have an honest conversation with them and give them the plan. It might not be right now. I have clients that I’ve spoken to many, many years ago that we’re still in contact with, you know, whether it be through social media or through a drip campaign of, you know, people that I’ve spoken with and they weren’t ready to go, their credit wasn’t where it needed to be. We give them a strategy and a plan. We— you know, it’s a year later, they are ready. And those are the best types of clients because they remember you, they like you, they come back to you because you gave them help and no one else did. If you’re not doing that, you’re missing out on a lot of opportunity and the guys like me that are out there are gonna be able to take advantage of that and of— of that market share to help these people out. And, you know, it’s the little things, really.

Dylan Silver (23:36)
We are coming up on time here, Carmen. Any new projects that you’re working on? And then also anything you’d like to mention directly to our audience.

Carmen Cipolone (23:45)
Yeah. So I’m actually working on a— a new project in Pennsylvania right now for a client that they own the ho— they own the land. It’s eight acres and they have a— a— a building on the property now. They want to add another building to the property. So we’re getting in the middle of getting all that dialed in with finding the right contractor, making sure that the permits are going to be able to be activated through the county. You know, it’s not as easy as just going and getting a loan. You have to put— you have to put everything, you have to— you have to be one foot in front of the other and make sure that you’re doing it the correct way because there’s people out there that, you know, they get themselves caught up in a jam and then they can’t sell the house after— after afterwards. You want to have it done right and done right the first time. So that’s what I’m working on today, one of the— one of the items. And I’m always looking for new projects for myself as well. I’m a big believer in working with people and partnering across the country that have the same mindset and the same values that I do, like-minded people. And so I’m always open to speaking with investors because I’m one myself. It’s— it— it’s not— I’m not all about just the loan side. I wanna be, you know, I’ll— I’m— I’m an investor just like them. And I’m willing to put my money where my mouth is and partner with people across the country that have great ideas and great projects that we can all win on. So if anyone out there that’s watching this is, you know, feeling what I’m saying and are looking at ways that we can pool our— our— our— our resources together and make things happen for, you know, all of us to win, I’m— I’m— I’m down for that as well. So—

Dylan Silver (25:33)
Carmen, thank you so much for your time today. Thanks for joining us.