Navigating Self-Employed Mortgages: A Step-by-Step Success Guide

Brett McCollum (00:00.791)
guys, welcome back to the show. am your host, Brett McCollum, and I’m here today with Scott Hastings. Today we’re going to be talking about self-employed mortgages. Before we do, guys, at Investor Fuel, we help real estate investors, service providers, and real estate entrepreneurs to 5x their businesses to allow them to build the businesses they’ve always wanted and live the lives they’ve always dreamed of. Without further ado, Scott, how are you?

Scott Hastings (00:23.522)
I’m doing great, how are you doing today?

Brett McCollum (00:25.325)
Man, doing good. It was really good getting to know you before the show. You got a lot of cool things going on. I’m gonna tease the folks a little bit with your, you got some mini, mini farm things going on with, that’s pretty interesting. But before we get into all the stuff, you know, we got a lot to talk about. Can you do us a favor, Scott? Like rewind, pull the, kind of back up a little bit, tell some context, some history. Who is Scott Hastings?

Scott Hastings (00:48.301)
Who is Scott Hastings? Wow. Okay, you ready? ready? Okay, this is good. So I am coming to you live from Mooresville, North Carolina. Mooresville is right outside Charlotte. Mooresville is known for NASCAR and Lake Norman, also known as Lake NASCAR. so I grew up in Charlotte and my wife and I own a farm.

Brett McCollum (00:51.161)
That’s a deep question there.

Brett McCollum (01:06.265)
Mm-hmm.

Scott Hastings (01:17.879)
So my wife is a professional dressage trainer. Dressage is an Olympic sport, equestrian sport. That’s all she’s ever done in her entire career. So on this horse farm, we have 17 acres. We have horses, of course, dogs, chickens, and two mini donkeys named Chips and Salsa. They’re the stars of the show. They don’t do anything but eat and look cute.

So, you wanna hear some more about Scott Nesing?

Brett McCollum (01:52.397)
Yeah, mean, so you are in the mortgage space, obviously. Like maybe before, how long have you been doing that?

Scott Hastings (01:59.756)
Yeah, so I have been in 2003. I’ll give you a short history of time. So I did not have auspicious beginnings, right? I was a young guy, very, very lost, kind of screw up. And I got out of high school in 1986, so I’m, you know, elderly AARP material.

I went to college for a semester and did a ton of partying at a point for was asked not to come back. was got arrested. so 1986 was not a good year. went to community college for a couple of years and ran around Charlotte with friends. Had a friend that had gotten sent to a new Mexico military Institute.

Brett McCollum (02:37.718)
Yup.

Brett McCollum (02:44.631)
Yeah.

Scott Hastings (02:56.426)
high school and he decided he needed some discipline, was going back and asked if I was interested. I said I need some discipline bad. I, at 20, I went to New Mexico Military Institute for junior college and spent a year there, got all the discipline I needed. And then I went to East Carolina University. If anybody’s familiar with East Carolina University, it was ranked number one party school by Playboy.

many years in a row, perfect place for me. So I had the discipline to get out of East Carolina. I tell people anybody can graduate from Duke, try to graduate from East Carolina. I met a girl my senior year of college who was Swedish and we just, long story short, I moved to Sweden for three years and worked for a Swedish company.

Brett McCollum (03:32.94)
Mm.

Brett McCollum (03:50.754)
Mm-hmm.

Scott Hastings (03:54.537)
selling annual reports. was really before the internet was a thing much. And I did that for about eight years. That job ended. And then I said, what could be easier than being a mortgage broker and making big money? Right. So my wife was pregnant. went to a commission on my job. A girl that I used to date had said one time leap and a net will appear. Well,

Brett McCollum (04:10.392)
you

Scott Hastings (04:22.842)
It will appear, but sometimes that goes all the way to the ground and you bounce back up. So if somehow I stayed in the morning business until 2008, helped some guys grow at Linder, actually. Everything blew up, got out for a couple of years, did some other things and I’ve been back since 2012 and it’s a great job. love it. And yeah, I tell people you can only do things.

Brett McCollum (04:28.308)
Mm-hmm.

Scott Hastings (04:52.378)
one thing well and that’s what I did, was more than just.

Brett McCollum (04:56.448)
Wow. Let’s take a breath because there’s a lot going on. Man, you’ve lived a couple of lives, huh? That’s a… I like hearing and I appreciate you sharing that, by the way.

I think a lot of us at a young age going into college, that sort of thing is, we don’t know who we want to be when we grow up. was talking to somebody else about this the other day, and you’re expected to clear these majors, and you’re expected to tell the world, more like, tell the world, end quotes there, what you’re going to do, and these are what my plans are. But a lot of us, I don’t know what your upbringing was like before college, but a lot of us are lost before we ever get there.

The whole world has then thrust at you and everything that it can quote unquote offer. I mean, I know a lot of us have maybe, similar to yours, there’s some things that we probably wish we wouldn’t have done. There’s some things that we maybe we wish we wouldn’t have done, but maybe we’re glad we did because it made us who we are today.

you know, stuff like that, right? But I just find it interesting, like all the journey that you went through to get to where you are. It’s not, it wasn’t a smooth paved road, right?

Scott Hastings (06:11.718)
Okay.

Scott Hastings (06:17.821)
No, no, and I mean, I think as I, you know, I work with a lot of self-employed people, I like self-employed people and I am, I am self-employed. I see a theme that goes through a lot of us, you know, that are people that don’t like rules, you know, they don’t want to work for the man, they want to make their own way. And, and sometimes that doesn’t start off in a real,

I’ve met a lot of people that are really successful in the mortgage business and other businesses that had similar stories. Either they grew up in very challenging upbringings where they had no money, maybe had drug, alcohol problems. And once I get through that, yeah, sometimes I think you channel that addictive personality into business and entrepreneurship. And I think probably lot of people watching maybe can identify with that.

Brett McCollum (06:50.956)
Right.

Brett McCollum (07:14.136)
Yeah, for sure. mean, we always make the running joke because you got to be a little crazy to be an entrepreneur, right? Because I don’t want to work for the man because I’m giving them 40 hours a week and blah, blah. then you’re working 120 hours a week for yourself. And you got to be a little crazy to be able to do that.

Scott Hastings (07:34.532)
And I think It’s already rough, but like I have this YouTube channel and you know, y’all have people reach out I’m sure And you come across a lot of people that are dreamers, right? And I’m sure y’all come across a lot of people that are dreamers looking to do investment properties and stuff and A lot of people just don’t want to put in the work They weren’t based they see the dream the Instagram ads they see this fake life that you know, you just want to make it but

Brett McCollum (07:38.198)
No, you’re good.

Scott Hastings (08:03.243)
I mean, it’s a grind. I tell people, I’m like a doctor, I’m on call all the time, but I like it. I could never work for somebody else. That’s why I’m self-employed.

Brett McCollum (08:15.864)
think the biggest juggling act for, you know, we were talking kind of pre-shove, you know, I’ve got small kids, know, married four kids and it’s how, and all of my kids ever want is more time.

More time, more time. They don’t really care about all the other stuff. And the hardest thing as a self-employed person is being able to know what that balance really looks like. So I had a coach teach me this. I wonder what your thoughts are here, Scott, is he taught me that there’s no such thing as time management because you can’t control time. He said you have priority management.

Scott Hastings (08:49.728)
Exactly. Yeah. My coach, and we talked about that before his name is Scott Groves, a mortgage coach. You know, he says, say no to the good to make room for the great. You know, so I think a lot of it, and I have a hard time with this is saying no to people because I want to help everybody. And I basically do. But at some point you find that the most successful people in any industry

Brett McCollum (09:06.04)
Mmm.

Scott Hastings (09:18.914)
They have to say no to most things, right? To make room for what’s actually good. And that’s, I think that comes with age and with, some people just naturally.

Brett McCollum (09:27.106)
Well, it’s the priority management. Like, how many times do you think something is urgent, but it really can wait kind of thing? Yeah. Well, I mean, if somebody’s calling me right now at 7 o’clock and I know, but they would never call me unless it was important. I gotta guess. This is, it can wait.

Scott Hastings (09:32.897)
Right, you’re not as important as think you are.

Scott Hastings (09:47.444)
Yeah.

Brett McCollum (09:48.057)
You know, and my kids don’t want me to like, dad, you just got like, da, da, da, da, da. Now you’re like, you know, and you’re, I’m present with them. This is, dude, I’m spilling my guts here. Like, this is all being pointed fingers. You’ll be at a, doing something with the family and I’m there physically, but mentally I’m thinking about everything else.

Scott Hastings (10:07.38)
Right? And then, you know, I always think to myself in a week, what’s going be different, but especially with children, you’re not going to remember, they’re not going to remember the money or the deal you had or whatever. They’re going to remember the time you had, what didn’t have with them. So, know, what’s like you were saying, what’s actually important, you know?

Brett McCollum (10:30.496)
It’s tough to do though when you’re as, cause like, when you work 40 hours, well, when you’re working 40 hours plus for another company, like that check’s coming in. But when it’s, when it’s me, it’s me, you know, and if I have to like, you know, like.

Scott Hastings (10:41.173)
Yes.

Brett McCollum (10:47.03)
do I take two days and go spend out of town with the family and da da da? I just have too much to do right now. And because if I don’t do that, then those two days parlay into the next two weeks. then it’s just, it’s a tough game to figure out the priority management. It really is. And you’re always working on it.

Scott Hastings (10:59.368)
Yeah.

Scott Hastings (11:04.617)
Yeah, I think one thing that I’ve learned is no secret is go ahead and book a trip, you know, six months out and then you just gotta, it’s gotta do it. Otherwise it’s just not gonna happen.

Brett McCollum (11:15.896)
stick to

Brett McCollum (11:20.79)
Yeah, no doubt. So let me ask you this. you get back into the mortgage, you go into the mortgage and then 2008 rolls around. don’t know, something probably happened in the world in 2008. I’ve probably never heard of it.

Scott Hastings (11:33.96)
Yeah, it was a little, yeah.

Brett McCollum (11:36.184)
Yeah, the little thing that happened, so many mortgage folks went, my gosh, if there was one category of people that got impacted, even more than the average bear, it was the mortgage professionals. How did that impact you? Because I know you picked it back up, but what happened?

Scott Hastings (11:42.175)
Yeah.

Scott Hastings (11:51.484)
Yeah.

I went bankrupt, you know, to be blind. Yeah, I kept my house because if you remember that time, everybody was upside down in their house. So yeah, I started over. Now I was 40, maybe I was 40. I don’t know, something like that. But yeah, it was brutal. my daughter was young.

was brutal. But it was brutal for a lot of people. Really, that’s something that as a mortgage person, I find that so many people bear their soul when they call and talk to you. Basically, I talk to so many people when I get back in the mortgage industry. Basically, so many people declare bankruptcy, foreclosure, all of the home builders, small home builders, they were done. Everybody was done.

So was a great reset and really I went out and tried a few other things, realized that mortgages was what I was actually like. so I was able to really kind of start at a perfect, over at a perfect time. know, 2012 things had started to turn back around. I mean, anybody that bought Realist

Brett McCollum (13:10.647)
Yeah.

Scott Hastings (13:18.076)
So, yeah, guess, yeah, if I’d had some money, I guess we would all, you know, have made a lot of money at that time. But yeah, yeah, I started over and I just started from scratch. But one thing I’ve learned and I try to tell any agent or anybody I work with is I’ve always kept a database, right? I’ve always kept my CRM, anybody I talk to. And if you work for another company,

Brett McCollum (13:28.951)
Yeah.

Scott Hastings (13:45.659)
doesn’t matter if a mortgage company, real estate company, whatever, have your own database, keep your own data. Because I’ve realized over the last five, six years, lots of my business comes from past clients and referrals from past clients. And that is very valuable, right? And so anyway, yeah, that’s a little nugget that I’ve really has paid dividends. And also get yourself on Google My Business.

Brett McCollum (13:57.793)
Yeah.

Scott Hastings (14:15.194)
which is, you know, that’s the best free advertising in the world, Gits and Merdi is.

Brett McCollum (14:20.096)
No doubt that’s great too. Yeah, so and I want to pick up into your kind of what today looks like here in a moment, but there’s a, okay, let me see if I can paint the picture. The 2008, know, going through the bankruptcy, doing that losing, know, going to, you know, starting over there, our market right now, albeit it’s not 2008, but there’s been

I’ve talked to lot of people that are on the struggle bus, like hard, hard struggles right now, losing massively, you know, and going through very similar pain points. How do you talk to that person? Because you’ve been through it now and you learned some lessons and you went and you came out the other side of it. How do you talk to that person that like, example, I’m like, I didn’t, I started after the crash.

Scott Hastings (15:05.325)
Yeah

Scott Hastings (15:14.166)
Mmm, okay.

Brett McCollum (15:15.16)
And there’s so many of us in the real estate investor space that this first more or less quote unquote downturn that they’ve ever seen. How would you talk to that person?

Scott Hastings (15:22.775)
Yeah.

Mm.

Scott Hastings (15:29.411)
So.

Scott Hastings (15:33.336)
I talked to a guy, good friend of mine yesterday, he’s a very successful real estate guy. He’s only been in the business about four years, but he’s a grinder. know what mean? I mean, he is on the phone calling, expires and whatever they call it, circle prospecting, all that stuff, like three hours a day, every day. And he, he still does good business. Now he’s struggling like everybody, but I think in every market you’ll notice, no matter how bad the market.

Brett McCollum (15:40.183)
Yeah.

Scott Hastings (16:02.839)
there’s a small percentage that are doing well, right? I guess 80-20 rule, but I think within the 80-20 rule is another 80-20, you know what I mean? So I think for one thing, it’s just basic. Americans in general are over-leveraged. mean, we have the most credit card debt in history, right? So I think if you want to really be an entrepreneur, you have to have longer term thinking, and that is also to not have immediate gratification.

Brett McCollum (16:10.092)
Yeah.

Scott Hastings (16:32.715)
So where you come back on expenses, where you can just put some cash aside to be ready for an opportunity that’s going to come up. That’s what I would say. And also I see a lot of people, like I deal with a lot of investors and in my market, you know, it’s growing like crazy. Charlotte’s not the only place growing. There’s places all over the country, but look outside, you know, so there’s a

I happen to be around this little place called Salisbury. You know, I can just look at it and tell in five years, those home prices are going to go way up because it’s still affordable. But yeah, I mean, basically just have some dry powder, even if that’s just having little debt or as little as possible and just wait for an opportunity. And I’ve just noticed in my career, there’s some things that it’s just time, only time can take care of.

Like you can grow as hard as you can and you’re making little pieces of progress every day that you don’t really recognize. But in time, if you just keep doing that, things are going to get better. And all what you see falling out, I guess the real estate industry has like insurance and everything else, it’s fallout ratios, huge. So treat it like a business. I mean, which is get up early.

Brett McCollum (17:30.712)
All

Brett McCollum (17:52.641)
Beach.

Scott Hastings (17:59.285)
work, you know what mean? Work on the weekend if you have to, but like we talked about before, within reason, set aside time for your family. And yeah, I mean, that’s what I would say. There are deals out there. And look for, you know, in the mortgage piece, there are ways. So I talk to people, first time home buyers, I just try to plan a seat with them. I say, look, just get into your first house. After a couple of years, you’re going to, your family’s going to grow, you can go somewhere else, but you can keep that house as a rental property.

Brett McCollum (18:05.72)
Okay.

Brett McCollum (18:09.794)
Yeah.

Scott Hastings (18:29.013)
Before you keep, and I do this with lot of investors, before you put it on the market, go get a home equity line of credit up to 100 % of the value of the house. Use that home equity line of credit for the down payment on the next house. You can use 75 % of the lease on your departed residence to offset the mortgage so it almost doesn’t exist and then go buy another one and then do it again. So I think I see, I’ve talked to a lot of people that want to.

become a real estate investor and have, you know, whatever, four doors overnight. You just have to sort of start where you are and anybody that’s a homeowner is living in their future rental property, you know? So anyway.

Brett McCollum (19:09.527)
Yeah.

Yeah, yeah, and that’s phenomenal, like long-term thinking is, and by the way, I think you learn that from going through stuff. You know, we want to get through it, like we want it now, and especially now with things being difficult, I know a lot of entrepreneurs that are just like…

Scott Hastings (19:20.168)
Yeah. Right.

Brett McCollum (19:27.416)
having to start back over again because they lost it from over leverage, things like that. Having that long-term thinking of saying, hey, this is not meant to be overnight success. This is long-term. So I love that. What does today look like for you? What are you working on? What are you excited about right now in the business?

Scott Hastings (19:31.667)
Right.

Scott Hastings (19:41.619)
gosh. So I deal with a lot of, you know, I all kinds of mortgages, of course, but what I really like is working with what they call non QM, non qualified mortgages. That’s, know, self-employed people that can’t qualify or don’t qualify because they write off all their income and their tax returns. So helping self-employed people buy homes using bank statements or 1099s. But what I’m doing sort of a

Brett McCollum (19:54.76)
huh.

Scott Hastings (20:11.352)
unusually high amount of right now, this month, for example, is DSCR loans. You know, I’ve got a guy right now. We tried every single way to get him qualified. He’s a real estate investor, actually owns plenty of property, but the way he does his taxes, there’s no way to qualify. But he decided, well, I’ll buy the house that I want to rent it out for a couple of years while I fix it up and then I’ll move into it. So it’s a one.

Brett McCollum (20:16.78)
Yeah.

Brett McCollum (20:28.918)
Yep. Yep.

Scott Hastings (20:40.658)
$2.5 million house on Lake Norman. He’s putting 25 % down and doing a DSCR loan. what I like and I think a lot of people, even brokers, I actually just talked to my rep at UW Home. shouldn’t have used the company. He didn’t know about this. So you can use, if it’s an Airbnb property, there’s something called AirDNA. Have you heard of that? Probably. So you can use the AirDNA score instead of

Brett McCollum (21:05.89)
Mm-hmm. Yep.

Scott Hastings (21:10.693)
the rental analysis to qualify. Yeah, so well, there is no income to qualify. The only thing to qualify is the cash flow of the property. you know, usually when you do an Airbnb property, you can’t use this Airbnb rent because it doesn’t exist, you’re buying them. So they use air DNA. So the only thing you’re looking at is the ratios. So normally a wooden ratio,

Brett McCollum (21:13.666)
Sure. I already know you can use it to qualify, that’s cool.

Brett McCollum (21:22.242)
Correct. Right.

Scott Hastings (21:38.714)
but their DNA almost always ratios. So anyway.

Brett McCollum (21:42.093)
This is probably something I shouldn’t tell Scott, but a lot of us, what I was taught with Airbnb stuff is find a person that’s arm’s length or more away from you that’s willing to sign a lease for a year, make up the number on it, submit that lease in, and then we quote unquote sublet that into the, so we can Airbnb. That’s how we.

Scott Hastings (21:49.604)
Yeah.

Scott Hastings (22:05.466)
These are things we talk about on the telephone, not in email or recording.

Brett McCollum (22:10.474)
So knowing that you can use the AirDNA score changes things, actually. That’s a good nugget, man. Like, I didn’t know you could do that.

Scott Hastings (22:17.263)
Not all investors or banks, interchangeable term will do it, but a lot will. And there’s also something called no ratio. In other words, you don’t need either. It’s just going to have a little more, you have to put more money down and the rate will be higher.

Brett McCollum (22:32.68)
Yeah, yeah, yeah, that’s I just that’s interesting. That’s a good nugget there. And I love that you do that because we were talking kind of offline a little bit see like so many of us. The whole goal of for a lot of us as entrepreneurs is like our tax liability to be as close to as possible. So if I can report no income, awesome. That means my taxes are what they are. But that doesn’t always

Scott Hastings (22:55.448)
Yeah. Yeah.

Brett McCollum (23:01.752)
We live in a world that you need credit score and you need this and you need that and you need, you have to look like everybody else or else you don’t qualify like everybody else. It’s really cool that you understand that side of it. There’s ways to work around things. All right, let me ask you this question selfishly. What about for these non QM type products, interest rate type situations, are they higher than average? Are they about on par? What do you see normally?

Scott Hastings (23:17.966)
Yeah.

Scott Hastings (23:25.261)
Mm.

Scott Hastings (23:30.637)
going to be higher. mean, so basically, if you’re putting the minimum down, then the rate is going to be the highest. primary residence, 10 % down. That’s going to have the highest rate. So this gentleman that’s doing this DSCR loan. Now, when you do a DSCR loan, which is an investment property, of course, you can have a prepayment penalty. So if you’ll take a prepayment penalty between one and five years, the rate goes down and down.

Brett McCollum (23:53.388)
Mm-hmm.

Scott Hastings (23:59.629)
He’s going to keep it for a long time. So he said, he’s okay with, but yeah, five year free play. So his rate is under seven, which is unbelievable. But, um, you know, he’s paying basically a point for that, which is, you know, no, it’s not bad. Um, the one product that I have done several cash outs on this year and a few purchases that I don’t think many people know about, because there’s only two banks that do it is a no ratio one or a primary residence.

Brett McCollum (24:01.483)
I see.

Brett McCollum (24:06.038)
No, that’s great. That’s huge. Yeah.

Brett McCollum (24:13.504)
Nothing.

Scott Hastings (24:29.928)
So if you have basically a 680 to 700 credit score and 20 % now to put down, you don’t have to claim any income. And you just have to have six to nine months of reserves, mortgage payments and reserve. Now the rate is going to be 9%. But there’s some people who just don’t fit in any box except that box. And it’s also what I’ve done a lot of is cash out.

Brett McCollum (24:54.316)
Yeah.

Scott Hastings (24:57.577)
So primary residence cash out, good job, good credit. So anyway, basically I tell people that if you have cash or credit, there’s usually a way to do it. But if you don’t have any cash and you don’t have credit, then you’re out of luck.

Brett McCollum (25:14.838)
Yeah. And even then, there’s, you know, as investors, we have created finance and there’s different ways. There’s always a way to do things, but from the lens of a mortgage broker and what you do, there’s so many different options that exist that are not…

Scott Hastings (25:19.701)
Yeah.

Scott Hastings (25:27.743)
Yeah.

Brett McCollum (25:33.881)
I just like the fact that you’re out of the box. You’re not thinking like, you know, cause that’s the biggest issue. When I’m teaching people and talking to people like, basically what I’m telling them straight up, like if you have a W-2 and you can do this also on the side, keep your W-2. Cause you don’t know how hard this is going to be for you. Nobody taught me this. Nobody told me that like, Hey, when you go off on your own, life’s going to be hard. You know, not just running a business, but cause that’s hard too. But like,

Scott Hastings (25:49.276)
Yeah, definitely.

Scott Hastings (25:56.34)
Right.

Brett McCollum (26:01.996)
The world, our economic society is built upon the W-2. And nobody taught me that. So now I’m like, my gosh, you can make plenty of money, you can have a lot of money in your bank account, but guess what? Try to go do anything.

Scott Hastings (26:06.143)
Yes, exactly.

Scott Hastings (26:17.203)
Yeah.

Brett McCollum (26:17.24)
if your taxes don’t look like everybody else’s. And that’s hard, man. I have a local bank that I bank with, and I went to that local bank. I know the VP of that whole, he’s a good, good friend of mine. He’s their number two at this bank. And he’s like, look, straight up, he goes, I see your account, see what you got. goes, if you don’t make it look like this, we can’t do it. And I’m like, and I’m literally trying to get a loan from your bank, and you have access to all of my income,

Scott Hastings (26:21.501)
So, yeah.

Brett McCollum (26:47.374)
and outgoing expenditures here, what am I supposed to do? This is a few years ago at this point. I didn’t know what I didn’t know. didn’t know that Scott’s existed. didn’t know that these, you know, I didn’t know. So I’m so glad you’re doing this and exposing this to more people. If people want to reach out to you and get to know you more, what does that look like?

Scott Hastings (26:51.977)
Yeah. Yeah.

Scott Hastings (27:09.225)
My website mortgagesbyscott.com and I have a YouTube channel mortgages by Scott Yeah, that’s the best way

Brett McCollum (27:18.604)
I love that. We’ll make sure it gets in the show notes and people guys definitely reach out and do that. But man, Scott, this has been great. Thanks so much for being here with me and spending your time.

Scott Hastings (27:27.816)
Thank you, I really appreciate it, I enjoyed it.

Brett McCollum (27:30.105)
Yeah, perfect. Well guys, you as well, thanks for spending your time and hanging out with us and we’ll see each of you on the next episode. Take care everybody.