Think You Need 20% Down to Invest in Real Estate? Jennaba Clarkson Explains Better Loan Options

Jennaba Clarkson (00:00)
I would just tell them to just prepare even if their credits not where it needs to be just start preparing, you know, because Even if they don’t know right now get with a lender and see where you are and see what you need to work on because I know ⁓ Most people don’t exactly know what to work on They don’t have any type of guidance So, you know get with the good lender to you know, look at look at your profile and tell you what exactly you need to do to

hit that goal of investment, you know, if that’s your, you know, short-term goal, long-term goal, wherever you are, you know, mindset.

Cody Crabb (02:10)
Welcome back to the Real Estate Pros podcast. I am Cody Crabb with Investor Fuel. Today I’m joined by Jennaba Clarkson, also known as the mortgage expert Jen, a loan originator with Security National Mortgage who helps clients get strategically approved and into homes with the right financial setup. Thank you so much for joining us today. Really appreciate it, Jennaba.

Jennaba Clarkson (02:29)
You’re welcome, Cody. I’m glad to be here.

Cody Crabb (02:32)
So, all right, I would love to hear a little bit of your background. I gave you a little intro there, but kind of how did you get to where you are today? What led you to become interested in real estate and mortgages and lending and all the things that brought you here?

Jennaba Clarkson (02:47)
Well first just real estate At first I was so interested in its real estate. I thought about being a realtor, but I was like, well I don’t you know want to do all that running around The back and forth the driving all that all the good stuff, right? So I’m like, okay Well, let me you know be on the back end the finance side. So basically that’s how I started pursuing mortgages and lending right but I also

Cody Crabb (03:02)
Yeah.

Jennaba Clarkson (03:16)
So at that time I had also started my midterm rental business, because I’m also an investor, and growing that and scaling it.

Cody Crabb (03:21)
Hmm.

So what was it about the, I mean, I’m assuming that, like you said, it was mostly the schedule and the running around. Was it like the dealing with lots of different people? I mean, just out of curiosity, is it mostly just the actual logistics of going around that kind of turned you off from being a realtor?

Jennaba Clarkson (03:43)
no, because even as a lender, you deal with, you know, people and, I love helping people, but I think for me, yeah.

Cody Crabb (03:47)
Yeah, guess that’s true. Well, yeah, that’s true. That’s totally true.

Jennaba Clarkson (03:52)
at that time I lived in Texas and the traffic is bad. So now I’m in Oklahoma, but I was in Texas, the traffic was horrible. So I’m like, I’m not trying to be in traffic running around all day, you know? But I also love numbers. So the finance side made more sense, you know?

Cody Crabb (04:04)
Yeah.

Yeah, seems like a good

fit, yeah. Well, I would love to kind of get into, people always have lots of questions for people like you and they step into their office, I’m guessing. ⁓ And especially investors because they are like, this isn’t just like, maybe we can get into a house. This is like, they’re putting a lot of money on this. So when someone comes to you,

Jennaba Clarkson (04:16)
Yeah.

Cody Crabb (04:37)
thinking that they’re not gonna be able to qualify. I’d love, maybe let’s bust some myths. What are some things that you hear that’s like, that’s not true at all actually? What’s a common thing that you hear like that?

Jennaba Clarkson (04:48)
you

that you need 20 % down

I’ve had people even come to me wanting a USDA loan thinking just because they saw a TikTok saying that is zero down. you know, there’s and but the thing is, I then I have to explain, okay, yes, but if there’s also guidelines that you have to meet, your debt to income has to be a certain number and which, know, they’re very, you know, the USDA is very strict. Yeah, so I think just the education part because a lot of

Cody Crabb (06:00)
Yeah.

Yeah, yeah.

Jennaba Clarkson (06:11)
I just sometimes you know, they see the social media and they kind of run with what they see because it you know those videos They don’t tell you everything, you know

Cody Crabb (06:17)
Yeah.

Well, and we

hear a lot on this show, like, oh yeah, you can educate yourself. But I’m always a little bit careful though, because if you’re just pulling that from YouTube or just anywhere, you gotta be careful with that kind of stuff, because people can get stuff wrong and just post it. mean, no one’s stopping them from doing that. So yeah, I think that’s really important. So all right, what’s, I would love to hear kind of.

Jennaba Clarkson (06:43)
Yeah. Yeah.

Cody Crabb (06:49)
What are some of the mistakes you see? Let’s say I’m a first time investor. What is a mistake that if I walked into your office, you’d be like, red flag right there. That’s a total red flag.

Jennaba Clarkson (06:59)
Just not having your credit where it needs to be and not preparing, not having capital. I actually had a recent client. It was actually a group that wanted to invest and I kind of gave them a little education on the best way to become first time investors with as little money down. And they needed a lot of work on their credit. They just wasn’t ready.

trying to guide those type of clients and get them prepared you know because people feel like they don’t need credit you still need credit good credit to invest yeah

Cody Crabb (07:35)
So what’s,

Yeah,

of course. Yeah. Well, and I think people see it as a separate thing from like buying a house or something like that. And it is, but also like it follows a lot of the same, same things, you know. So when you say they weren’t ready, like how far off were, not these specific people necessarily, but like how far when, if someone says like, I’m ready to do this and you look at the numbers, like, is it common to see people that are just like, yeah, maybe in 20 years, or is it like usually just a couple of tweaks that they need to make?

Jennaba Clarkson (07:48)
Yeah.

in.

Hahaha

it just depends on the person. Sometimes it’s just tweaks, know, little things that might, you know, ⁓ need to be done, you know, to get their scores up if it’s, you know, someone that has challenges. And then, you know, if it’s someone that’s, you know, has, you know, somewhat good credit or better. Yeah. So, you know, I can kind of work with those folks. But, you know, there are different type of loan programs for investments. So, yeah, they have different type of guidelines.

Cody Crabb (08:32)
Yeah.

Well, so we’ll definitely, I’ll definitely want to ask you about that.

But I do have a question for you as far as like, well, we’re kind of talking about dealing with actual borrowers. What does a strong borrower look like? So we said that what the people that are unprepared look like, what is it? What is, when someone walks in your office and you’re like, okay, they know what’s up, they know what they’re doing. What does that look like?

Jennaba Clarkson (09:00)
What that looks like to me, I’ll give you an example of a file that I received where that person was on point. I had a 23 year old young lady just graduated from college and she wanted to purchase a home. Her credit, you know, was great. You know, it was 700 plus, you know. Her debt to income was pretty good. You know, it was very low. You know, she worked, she prepared, she worked on herself before even coming to me and she took

all the right steps to make sure she didn’t max out her credit cards. So everything was great. So that’s what a prepared person looks like for me. age doesn’t matter. know, normally when you think about a person like that, you would think that they’re not prepared at that age. So I was very surprised even having a client as young as 23 and purchased a home right out of college. That’s just one example.

Cody Crabb (09:50)
Yeah.

Wow. Yeah, so, well,

Jennaba Clarkson (10:00)
you

Cody Crabb (10:00)
and that’s the thing too. mean, and this is another question that I’d have around there just before we move on. ⁓ So we’ve talked a little bit about kind of getting financing, but like for investors specifically, ⁓ what’s the difference? What kinds of things do you kind of…

Might you look for in an investor that you maybe not would not look for in a regular kind of home buyer?

Jennaba Clarkson (11:03)
⁓ For an investor, would look at more capital, of course. You know, because when you’re making a big investment, you do have to be prepared and have capital. You can’t have down payment assistance with an investment loan, like a DSCR loan, things like that. You can have a gift.

you but you can’t have DPA. So things like that, just have to be prepared and have, you know, some money put up to make those investments. But there’s also things like house hacking for people that, you know, may not have the 20 to 30 % down to put down, you know, on a DSCR loan or, you know, or rental property that they want to purchase. So there’s ways to, you know, house hack to, you know, buy your property, live in there and then rent it out later, you know, things like that.

with his little as 3.5 down with the FHA loan.

Cody Crabb (11:56)
Yeah, see that’s interesting. ⁓ I mean, you mentioned what before while we were talking, you mentioned that there’s some programs specifically for investors. Let’s talk about that a little bit. Like what kinds of things are out there?

Jennaba Clarkson (12:07)
There are the DSCR loans if you want to you know purchase a rental property and then we just basically look at the you know market value of the rent and base it off of that, you know and not basically your ⁓ You know, know what you bring in, you know what you make and all the other documents So basically, you know what the property would basically bring in

Cody Crabb (12:25)
Interesting.

Yeah, sure. So.

That’s interesting. that’s maybe for someone that doesn’t have necessarily as much going on to bring to the table at first.

Jennaba Clarkson (12:38)
you

Cody Crabb (12:43)
what are the differences in terms between that kind of loan and your typical mortgage or other kind of loan that investors might get?

Jennaba Clarkson (12:53)
You can still get a 30-year loan as far as terms, but of course the investment, you know, the DSDR loans or, you know, the interest rates a little bit higher. The investment loans are always higher than, you know, single property or purchase for like a single family, right? That you would use as your primary residence. So those rates are always different. So expect to pay a little bit higher rate when it comes to those. But I mean,

Cody Crabb (13:21)
Yeah, I would say.

Jennaba Clarkson (13:23)
If you are, let’s say, a seasoned investor, they expect those things. They expect the rates between 8 to 12, depending on what type of investment loan you’re getting.

Cody Crabb (13:38)
Yeah. in that case, mean, are there other requirements? Like I’m wondering like a situation where, you know, maybe you don’t have the best occupancy rate and things like that. Like, does that factor in?

Jennaba Clarkson (13:51)
of the occupancy rate.

Cody Crabb (13:53)
Yeah, things like that. So I’m just kind of trying to imagine a scenario. Like I walk in there and I’m trying to get alone like this. What’s something that might deter that from happening?

Besides like the whole credit and all the normal stuff.

Jennaba Clarkson (14:44)
I think it just depends

on the person.

Yeah, just think it depends on the person and if they’re really ready, you know You know, especially if they have a really good lender they can kind of guide them through and prepare Then you know, they should be good. But know I’ve had I’ve been hands-on with a lot of my clients I am hands-on actually, but you know, just depends on the person sometimes I get clients that you know, they want to do it and maybe it’s a long-term goal, but they’re like, you know

and you know don’t want to make that leap but you know it’s all about preparation you know

Cody Crabb (15:24)
So how do you know? How do you know when you’re Because I think there’s qualifying and then there’s actually being ready and financially ready and also emotionally ready. What qualities do you see in people that are actually ready to go for it?

Jennaba Clarkson (15:31)
Mm-hmm. Yeah.

of course, like I said capital, their credit score. Yeah, and also their portfolio, right

Cody Crabb (15:48)
Yeah, but like the other stuff. See that stuff, of course.

Like let’s say that we’re talking about people that are qualified. So let’s talk about people like, all of them are qualified, but like someone that is like, you should do this now, I’d be curious to know, you I’m not saying you’d like you would deny them a loan or something. I’m saying like, I’d be curious when you go, okay, they’re ready to go for it. As opposed to like,

Jennaba Clarkson (15:52)
you

Okay.

Yeah.

Cody Crabb (16:12)
someone who’s kind of scared and nervous and like what do you what what’s your advice for them i guess is what i should mostly say what are you what’s your advice to the to the scared ones to the yeah

Jennaba Clarkson (16:20)
⁓ nervous, okay.

I would just tell them to just prepare even if their credits not where it needs to be just start preparing, you know, because Even if they don’t know right now get with a lender and see where you are and see what you need to work on because I know ⁓ Most people don’t exactly know what to work on They don’t have any type of guidance So, you know get with the good lender to you know, look at look at your profile and tell you what exactly you need to do to

hit that goal of investment, you know, if that’s your, you know, short-term goal, long-term goal, wherever you are, you know, mindset.

Cody Crabb (17:01)
Yeah, think that’s a good call out because I think people that want to… ⁓

get started on a whole new branch and things. The hardest part is getting started. The hardest part is actually seeing if it’s real. Because the minute you check and look at your credit and pull financial records and things, that’s when it starts to be like, maybe I can’t do this right now if I just wanted to. yeah, I would encourage anyone to just check it out. Just see. Just look. mean, if it’s something you want to do, it’d be good to know how realistic that is. Maybe you’re closer than you think and you just have

Jennaba Clarkson (17:30)
Yeah

Cody Crabb (17:39)
some small things you can do. ⁓ So, well thank you so much for joining us today, Jennaba.

Jennaba Clarkson (17:40)
Yeah, exactly. Exactly.

Cody Crabb (17:44)
Okay, so if someone wants to work with you or someone wants to find out more about you, where can they do that online?

Jennaba Clarkson (17:49)
They can look me up under, well, on Instagram as themortgageexpert_jen and on Facebook, TheMortgageExpertJen. I’m also on LinkedIn, under Jennaba Clarkson. You can find me on LinkedIn.

Cody Crabb (18:00)
Great.

Thank you so much. This has been really helpful, I think, for people that have wanted to get started. And thank you listeners for joining us as well. So if you liked what you heard today, like, subscribe, comment, do all the things, leave us a review. And don’t forget to follow us so that you don’t miss another episode. You don’t want to miss it. You don’t miss another awesome episode with someone like Jennaba Thanks so much one more time for giving us your time today. I really appreciate it.

Jennaba Clarkson (18:26)
Thank you so much, Cody.