Live Let Thrive Podcast
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Live Let Thrive Podcast
Episode 120: Pros & Cons to Mortgage Forbearance w/ Loan Expert Chris Henry
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Myka and Steve bring on loan specialist Chris Henry to break down mortgage forbearance - and discover the balloon payment catch that lenders don't mention upfront. Henry explains that after three months of deferred payments, borrowers must pay the full lump sum or enter a loan modification, a reality that makes forbearance risky for cash-flow-positive investors.
The conversation moves through strategies for weathering the pandemic: room-by-room rentals as recession insurance, note buying as a low-maintenance income stream, and the advantage of corporate rentals over short-term guests when travel evaporates. Henry warns that investors with properties under 12 months old won't qualify for modifications, and shares inside knowledge about potential six-month deferments coming from Fannie Mae and Freddie Mac. The hosts weigh whether panic-selling will flood the market and what opportunities exist for buyers with cash reserves.
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Cold open
SPEAKER_00Welcome to Live Let Thrive, a podcast about the Airbnb life, the share economy, and everything in between. Here are your hosts, Micah and Steve.
SPEAKER_01Hello, hello, hello.
SPEAKER_03And welcome back to another exciting episode of Live Let Rive. What's up, Stevie Stacks?
SPEAKER_01What's up, Micah, man? How you doing?
SPEAKER_03I'm chilling, man. A whole lot of stuff going on. People losing money, people losing houses, but uh, I'm good. How you?
SPEAKER_01Uh, so far so good, man. Just hanging in there and um taking it one day at a time, see what's up.
SPEAKER_03Yes, sir, yes, sir.
SPEAKER_01Got some new merch on my head, some LLT going on here.
SPEAKER_03LLT merch. What episode are we on?
SPEAKER_01This is episode 120 of your favorite Airbnb VRBO, home away, tarot, uh, share economy, real estate podcast, all that stuff, you know.
SPEAKER_03Yes, sir. We got another exciting guest. We got our guy, Chris Henry, in the building. What's up, Chris?
SPEAKER_01What is up, Chris Henry?
Chris Henry joins to explain mortgage forbearance
SPEAKER_03What's going on, everybody?
SPEAKER_02How you doing?
SPEAKER_01Oh, good, man. How you doing?
SPEAKER_02I'm well. I'm well. Trying to uh go day by day as we get through this virus here.
SPEAKER_03Coronavirus. Yeah. Yeah, man. So yeah, I uh so I uh I ended up picking up Chris as he won, he's been a loyal follower of the show, and uh I had posted a question today on Facebook and I was asking about mortgage forbearance, that's the cons of it. And uh Chris was like, man, I've been doing that, doing loan mods for about eight years. So I was like, oh yeah, you'd be the perfect person for the show. So picked up Chris and uh Chris is gonna give us the game, man. So if you do a mortgage forbearance, what is your opinion on doing that? Do you think it's a good idea just to save cash flow, or what's your opinion on it?
SPEAKER_02Well, uh, my opinion is based on your overall strategy and outcome. Um uh it just really depends on, and in this case, we're talking about investors, of course, obviously, right? But just overall in general, uh when it comes to forbearance is
What forbearance really is and how repayment works
SPEAKER_02is one thing that you have to watch, and that is the the underlying fact of you having to pay back uh these monies that is owed to your lenders. And so forbearance can be a good thing if you can continue to collect rents. You know, maybe you want to help out. In this case, we're talking about um, you know, uh a disaster, right? So a financial disaster based on what's going on with Corona. So if you're trying to lure and help someone out, yet still collect those rents uh for a few months, that's a good that's a good thing. Uh, but if you're simply trying to do this just based on uh not receiving any kind of income, then it's gonna be pretty tough on you when you come out of the term. So I'll get more into that as as we go along.
SPEAKER_01Okay, real quick, uh, can you describe what forbearance is for for some uh listeners that might not know what it is?
SPEAKER_02Yeah, so forbearance uh as ruled by Fannie Mae and Freddie Mack is a term that allows a borrower to basically forego their payments for a period of time and then eventually pay back what they're down on or have not been uh making payments on. Uh so there's no accrued interest, only the interest that you you currently on, um, and then you'll be you know in a forbearance for for about three months uh if they allow you to. So that's that's a forbearance in a nutshell.
SPEAKER_01So it's always no interest, or like let's say Wells Fargo is gonna charge me interest, or uh how does that work?
SPEAKER_02Well, it's gonna charge you the the interest that you have on that loan, but there's no additional interest, there's not pound or compound interest on the three months, if that makes sense.
SPEAKER_01Okay, yeah, because I could talk to Wells Fargo about this whole thing, you know, just to see what kind of programs they had. And they said they they offered forbearance and it was gonna be um, yeah, no, like I said, no payments for three months, plus no penalties, and it no no uh hits to your credit. No hits to credit.
SPEAKER_02That's right, that's correct.
SPEAKER_01Yeah, so and that that's what uh Michael was saying. Well, are they gonna keep charging us interest? And um, so I guess I mean if it's no interest, it sounds like a not a bad deal.
SPEAKER_02Right. So there's no uh accrued interest on the three-month
No additional interest but you owe the full amount at the end
SPEAKER_02forbearance time frame, uh only the interest that's currently in place. So if you if you're at a 4%, 4.25, that's what it's going to be. The the downside to that, again, if you're you're stuck in a situation where you're renters or uh, you know, if you're Airbnb host as you guys are, uh if you're not generating any income, once the term is over, you know, you're gonna be stuck with making that payment. That that three-month payment.
SPEAKER_01Oh, oh, oh, oh, oh, oh. So what what happens? I mean, what is that, how do they make you pay that back? Do they spread that over the loan, or what happens?
SPEAKER_02No, that's uh that's that's uh a payment that is owed um at the end of the term.
SPEAKER_03Hold on, at the let's see, uh at the end of the entire mortgage term or at the end of that three-month term?
SPEAKER_02At the end of that three-month term.
SPEAKER_01Oh I didn't they didn't tell me that.
SPEAKER_02Yeah. Yeah, I think we had a we had a conference call today uh with with some of our you know uh managers, and uh I specifically wanted to clarify that because I was coming on this show. And so so that the borrower would have to pay that term. Now, here's the key. The key is is that they are literally trying to uh pretty much put you in a modification type situation. So it's ideal for a person who's literally having a hardship. Uh so that's the reason why I was telling you guys it has to be careful, right? So if if a person is literally having a hardship, um this would benefit them greater because if they were current, they had a life-altering situation financially, they got behind, they use their forbearance to kind of get themselves together, maybe they change jobs, whatever the case is, after that term, either they're gonna pay that three months or they're gonna mollify this loan. So it's kind of like you know, setting you up to get you to get you modified.
SPEAKER_03Uh figure. I mean, I you can't outthink these things. I figured they had like some sort of way to where they make their money, you know. Um now I have a question. While your loan or is in a forbearance state, are you allowed to refinance?
SPEAKER_02Uh you are allowed to refinance. Um, but again, that's going to come down to the origination side. It's also going to come down to where you are with your credit, you know, so things of that sort. So um now you you you have to you have to complete the term though. So you you're not you're not asking why you're in the forbearance, can you refund that? No, you have to complete the entire term of the forbearance. So if that if that term agreement is three months, you have to go through that three-month term.
SPEAKER_03Okay. Makes sense. Dang. Yeah, okay. So you know accrued interest, but you're gonna have to pay that in full. Now, is there a way where you can because this is also what I was thinking, uh, because it sounds like a lot of forbearances, you're really gonna have to do some negotiating. So, like, is there a way where you could tell the bank, like, look, if I don't pay these three months,
Cap and extension rules for Fannie Mae and Freddie Mac loans
SPEAKER_03y'all give me these three months, can you just extend my loan period term on extra three months?
SPEAKER_02Well, that would that would be, and that that's gonna be based on the guidelines of who the investor of the loan is. So, for example, if if um you know if it's Fannie Mae or Freddie Mac, hold on one moment, let me get my so Fannie and Freddie has a thing called a cap and extension. So basically what that means is that you can get an extension if it's a Fannie Mae backed loan, uh, for the amount of months you're down on. So, for example, if you are uh two months down, let's just say hypothetically, um you were in this forbearance plan, you agreed to a 90-day forbearance term, right? And for the first month, um first two months, you wouldn't re you weren't generating income for whatever for whatever reason, whatever the outcome was. And that second month, you actually literally was able to generate income and you had the money, right, and you paid that particular mortgage for that month. So you're down two months now. So if you're down two months, they'll extend you based on their cap and extension for that two months. But that's only on a Fannie Mae, Freddie Mac back loan. So if it's an FHA USA USDA VA loan, it's not gonna work.
SPEAKER_01You know, saving, not paying mortgages. Right. You're saying on month four, they say uh that's due, you need to pay me that $15,000. Correct. Correct. Yeah. I'm almost I almost don't don't want to do it now, man. That's just like, what's the point? I mean, if I can still, you know, get my renters to pay and all that stuff. But then, you know, yeah, that's that's that's a rough one right there, man.
SPEAKER_02Yeah, so it it it will help, like I said, um on the on the borrow side. The investor side, uh, it may not be the ideal situation. Unless, unless, you know, you have a plan to keep this property um longer than you you want it to, um, along with being
Loan modifications could lower your rate but increase principal
SPEAKER_02able to either refinance that mortgage or you're going to go into a modification. Now, the upside about the modification is uh it could lower your your overall payment, you know, it could lower your overall payment. Um the principal obviously is going to uh increase because we got to restructure this loan uh and put those payments you missed on the back end, right? So that's gonna increase. Uh, but depending on what type of uh interest you have, uh you could get a lower interest rate and overall lower your monthly mortgage payment. Okay.
SPEAKER_01So in other words, there ain't nothing for free in life, huh, Chris? That's that's correct.
SPEAKER_03So and the reason why this came up, uh the listeners by the mortgage forbearance came up, because uh we were pretty much talking about like, hey, you know, we're after this whole coronavirus, we might be in a recession. We don't know what we're gonna be the economy's gonna be in shambles. And uh uh one of one of my economy, all of it. Gonna be. Yeah, it's already there. So we pretty much was like, hey, well, what's some ideas that investors or people homeowners can come up with, you know? And one of the people that one of my mentors, he went ahead and mentioned, he said, man, you can go get mortgage forbearance. And he said uh he was telling people, hey, if it's a pandemic, you gotta do what you gotta do. But it sounds it's just sounded like, man, from you really need to hop in that route if you really can't pay your mortgage, right?
SPEAKER_05Because it's right, right.
SPEAKER_03Yeah, because it's it don't really sound like you're about to save much, you know. You're about to just unless you just stacking bread, you know, just want to pay it all off at the end. I don't know, you know.
SPEAKER_02Right. No, um, it's definitely not the ideal situation for uh the investor that is cash flow positive, um, you know, that has a a pretty good return rate on their rents. Uh I wouldn't advise investors, and that's the reason why I want to get on this uh show to to share the knowledge that uh is coming down from me and uh to help out the community. So uh but it's not the ideal situation to uh go ahead and and get a forbearance uh if you're in that situation, especially if your tenants are actually paying, you know, they haven't been hit uh in any way, uh financially in any way. And so uh I wouldn't I wouldn't necessarily advise that part uh uh of the strategy uh unless you want to literally modify the loan.
SPEAKER_03Oh man, I just uh because I talked to Wells Fargo and they're like, we'll give you three months, you know. I I just talked to them, they're like, Yeah, you ain't gotta pay it for April, May, and June. I'm like, oh, cool. But they was like, we'll send you all the paperwork after the term, you know what I mean? So I'm like, nah, I'm about to pay mine.
SPEAKER_01I ain't about to be uh Yeah, but they didn't mean they didn't mention no balloon payment to us at the end, right?
SPEAKER_03No, they didn't. I've but but at the same time, he's the second source I've talked to that said that. It was like, yeah, they hit you with a balloon payment. It was like, because I've heard the only way to truly get away with it, you have to tell them, hey, you gotta give me no interest, and you gotta tack on the payments at the end, which is where Chris comes in. He was like, Yeah, that's just a loan modification. They just modifying the whole loan, right?
SPEAKER_02Yeah, that that's that's exactly it's it's basically, you know, I don't know if it's on purpose. I don't even think it's on purpose, but it is a bait in a sense to uh to get you in to modify that loan. Um now, what I can share with you is, and this is this is off
Possible six-month deferment coming from Fannie and Freddie
SPEAKER_02the record, so to speak, so for everybody listening, uh this is not completely set in stone, but we did learn something from uh Fannie Mae and Freddie Mac that there's a possibility uh that they're going to pass down a uh a for ban uh I'm sorry a deferment of payments for six months. And this is this is forever changing, guys. So uh this could change you know tomorrow. And it's kind of day by day based on what we're going with because go going through uh just because of the coronavirus and the updates we're getting. So now if that is the case, and if it is a Fanny Freddie loan, and they do roll out the deferment, then you it's in your favor. Okay, right. So it is in your favor if the deferment of payments are actually extended for the six months. Yeah, but again, that is that's day-to-day. So uh that's no guarantee just yet. Maybe if I learn something in the next week or so, maybe I can hop back on and give you guys some updates. So that's legitimate. But that'll be a game changer.
SPEAKER_03Yeah, that will be a game changer if they do deferred, you know, then dang, this that's that's it, that's interesting. Because I know the look from the last crash, they're trying to better themselves, come up with different kinds of ways, you know, come up with different kinds of ways. Because like you said, I think Steve's the one who says it all the time, man. The bank don't want no keys, man. They they want payments.
SPEAKER_01A lot of keys, man. Now the the funny thing is, oh go ahead. Go ahead.
SPEAKER_02No, I I was just saying that you know, Fannie and Freddie are very clear on uh not losing money. Um and they they'll stick um the lenders, the servicers with uh whatever penalties uh if if we didn't board those loans uh the right way. Uh because they're they're not they're not in the business of losing money.
SPEAKER_01Period.
SPEAKER_02So anyway, go ahead.
SPEAKER_01Um no, I bet a lot of this, and it's and it's funny how how this is happening, because I bet a lot of this is uh reminding people of of how they handled their student loans when they got out of college, man. All these terms deferment and forbearance. And it's yeah, and that's and a lot of these, oh yeah, I'm gonna save some money now, you know, I can still go out and party and blah blah blah. A lot of that is the is the reason we still have student loans because we did all that crap in the beginning. It sounds like free money, but you always gotta pay the piper with injury.
SPEAKER_02That's right. See, now I will I will say this. I will say this though. Um, I also learned too that there's no penalty to pay while in the deferment. You can actually pay, you know, um while you're in the forbearance, I'm sorry. Uh you can still actually pay while you're in a forbearance. Uh just to you know have a hedge against that balloon if you if you'd like. Um so that is a nice thing. They'll just sit the money in what we call suspense, uh, and then once you come out of the term, it'll it'll be applied. Okay. So just a little nugget there, too. So there's a lot to think about.
SPEAKER_01Yeah, because I have buddies that work, oh, I'm gonna do it, man. I'm gonna do it, and I'm gonna go, I'm gonna pay off my car while I'm doing it, I'm gonna do this and that. But okay, I guess it's free money for everybody right now, but yeah, there's a big catch, guys. I'm gonna go, I'm gonna be sure to tell them.
SPEAKER_02It it is a catch. And so I want to share that with you. That is a catch, and and that catch is literally uh a loan modification.
SPEAKER_01Yeah, which they'll get, I mean, imagine how much money they make. All these people figure out, oh crap, I gotta pay this back, and then they gotta try to figure out how to modify or refinance all this crap. Because I mean, that's a lot of fees involved in refinancing, right? Correct.
SPEAKER_02Yep. A lot of fees involved in refinance. You you have to come out of pocket for the appraisals. Um, the origination fees are a little bit different, the credit score, uh it's a little different uh qualification than uh a new new home buyer's.
SPEAKER_01And let's say in that period, maybe your credit goes down, and then uh in that period also um I don't know. It's just like when when you get to that point where you gotta pay it back, and you're like, well, you you gotta pay this money to us, or refinance or re or modification. And then you'd be like, well, I can't, I don't have
FHA seasoning period and modification eligibility
SPEAKER_01the money. And then you're gonna be like, okay, well, let's remodify it. And your interest rate, you the sweet interest rate at 4% goes up to like five or six because your credit's messed up now, and then that's the best, and plus you gotta pay all the fees. Ooh, it could it could get ugly. Yeah, it can get ugly. It can get ugly.
SPEAKER_03Yeah, because I've heard of people forbearing their mortgage and they get stuck with not only the balloon payment, sometimes they'll the bank will re-modify, like, oh, we'll add it on to the end, but then they'll uh oh I forgot. I gotta get Jabron to talk about it. He he broke it down, like he said, man, there's so many steps that you just don't know, you know. And that's why I pose the question, what are the cons? I don't want to know the pros. What's the cons? But but actually, I'd like to know now after talking about all this, what are the pros besides, I guess if you're just a person who can't pay at that time, is that the only pro to forbearing your mortgage?
SPEAKER_02Well, let me let me just share this with you and stay with the con here, real quick, uh, because I think some listeners need to know this. And this is important that if you have not been in a loan um more than 12 months, uh, especially an FHA loan, uh, during the seasoning period, uh, you you won't qualify for a modification. So you definitely would want to forego, especially if you are um you know receiving those rent payments, you you probably want to go for forego the forbearance um strategy.
SPEAKER_03But go ahead, Steve.
SPEAKER_01Now now question, what if like, let's for example, I bought my house in April, right? And and then so I'd put in for the forbearance now in March. But the seasoning, the my 12 months will come up in April, you know what I'm saying? During my forbearance. Now, how does that count also?
SPEAKER_02It has to be seasoned for a full uh 12 month. Now that is only on FHA loans.
SPEAKER_01Yeah, yeah. That's that's what I got. That's what I'm saying. Because like right now, if I I mean I I I started the forbearance right now, just but in uh in three months from now, it'll be twelve, it'll be past twelve twelve months.
SPEAKER_02Yeah.
SPEAKER_01So it'd be good to modify it.
SPEAKER_02So you you may, and that's something that you probably need to negotiate, you know, just say, hey, look, I'm I'm at this place. Um, you know, I'm I'm one month out for the 12 month season and really just let them know that you you know what they know, right? So you you you know what they know uh and just kind of you know share your your findings about this and just say hey I I've been making my payments, but here here I am today, and this is what I need help with. Um and and at this point, uh everybody is so vulnerable. Uh there is a there is a possibility that you would probably to get approved even uh you know that uh short out from being seasoning uh of the 12 months i can i can i can right off hand think of a a pro.
SPEAKER_01Okay because I mean this is yeah that's a scary facing a big ass payment big ass balloon payment at the end but instantly I'm thinking okay well this this um epidemic's going on right now and then there's some optimism president's saying hopefully by Easter things start getting back to normal yeah we'll see whatever but that buys you three months time if you if you're planning on selling this house right rental property that buys you three months to put it on the market try to get a good deal on it boom sell it then you don't have to face that balloon payment that is correct so that's that's a big pro right there and that that that is definitely something that uh you know can be done you know it just depends on you know in our market for the most part I I think that house houses sell if they're priced right uh anywhere from 56 days they're on the market or something like that on average right so it you know I think if you priced right I think you can you can do that.
SPEAKER_02What market are you in real quick? Well I mean I'm here in the uh little Frisco area.
SPEAKER_01Okay cool.
SPEAKER_03Yeah so and I'm happy Steve brought that up about selling um I was talking to somebody earlier and they said uh yeah matter of fact I we was talking about it before we started casting me and Chris we were like because I said um friend of my friend of the show he said he could see the after all this blows over he could see a lot of people panic selling their houses like hey you know this kind of got kind of scary they might those people who were saying hey I'm gonna sell but didn't never put their house on the market they might you know do a panic sell like fucking I'm gonna sell my house you know and uh that that's a good idea you know that those people are out there you know and then for people who have cash on hand it's good for them they can go ahead and hop in you know so it's uh it's gonna be an interesting it's gonna be an interesting little I think between now and September it's gonna be interesting to see what's going on yeah and believe it or not man people are already they're already tuning in yeah they're already tuning in to uh see what's out there you know and Fannie and Freddie are rolling out programs you know like I said we're getting updates day after day so uh just be on the lookout more updates are are sure to come uh as we move forward with this this pandemic so now now real real quick I'm gonna go over a con that I see and the con
Can you buy another house while in forbearance
SPEAKER_03that I see is that us guys us investors we're throwing our stuff in forbearance and but yet we're still wanting to actively look for good deals we can't go I mean can we go and buy put in for a loan to buy a house while we're in forbearance with our other four homes would that work?
SPEAKER_01Yeah you can and remember uh no nothing is reported to your credit uh there's no late fees assessed so you're basically free and clear of what you owe right you you don't you're not taking a hit at all you only may experience the hit after the the term is over so okay but I mean I just I just thought that'd be weird by saying calling up well far Wells Fargo hey you know I can't make my rents on the on the three rental properties in my personal home um because of you know because of Corona um but at the same time I'm calling back hey can I get a loan for a for a sixth house or a fifth house you know what I'm saying I just thought that would be that would look a little weird. Well it probably would with the same lender um ah good point good point but maybe not so much not so much if you go with uh Bank of America some people don't like Bank of America but uh if you go with Bank of America you may be you may be okay and and on that same note another pro would to to um for this whole the whole forbearance thing that people are talking about uh and then those that are looking to to get out of these homes you know like oh crap you know get it out of some of these these um these homes are not they're barely making you know the rents on from the from their from their renters you can go you with knowing this just this piece of knowledge going in there and trying to trying to buy these homes from them you have a real good negotiating tool because you say hey by the way I mean if you're a forbearance if you happen to be in forbearance right now you're gonna have to pay that back in three months. That's not free money. And they'll be like holy sh and then they'll be really motivated to sell you their house.
SPEAKER_03I mean that's a Yeah they they're trying to cut come up with this nine thousand dollar payment and you'd be like bro I can buy it right now you know get it off your hands how you think about it if you was to forbear like how Steve said $15,000 you forbear that let's say you forbear that put all those properties on the market you save that three months you can buy buy another property sell those you know it it it it it has some cons it's some pros. It has some pros you just have to be real the pros come out of creativity it sounds like well that and you you have to you know you have to talk to guys like me uh that are more on the inside uh who are really getting some of the you know the handouts uh from the investors and some of the mortgage companies and what we can and can't do uh you know and again like some of your private label lenders um they have different guidelines I mean they pretty much will be able to do whatever they want uh and that is something that you know I can't necessarily share with you because we don't always get those uh handed out as you would you know uh a government backed loan or or a fanny and Frederick because they're more more regulated if you will if that makes any sense makes sense okay man that's that's some good knowledge good nuggets right here man that we we're digging it uh real quick you
Why the Fed's zero percent rate doesn't help consumers
SPEAKER_03ever played football before yes I actually did we we were actually uh sharing that uh before we got on that I did play at UAPB University Arkansas at Pine Bluff uh then I played what position uh cornerback cornerback I I I thought I was Dion Best position to play out there yes sir yeah because I was just wondering how we're gonna market this episode I'm gonna say you know famous football player Chris Henry hops off the show yeah they probably mistake me like did he come back from did he come back a lot you know so they might be mistaking me for the Cincinnati Bangle that's cool that's cool but I did play though so that's good wouldn't be lying Chris said the famous Chris Henry on our show man but yeah man so yeah so forbearance you know that's an option to look at you know you guys know the pros and cons to it if you're gonna do that.
SPEAKER_01Now here's a big question people people were wondering especially me because I people are like when they saw the the government the interest rates you know the Fed dropped the interest rates to zero they're like oh crap I'm gonna redo my loan and they call up the banks and they're like actually rates uh three point three point seven or three point eight right like wait a minute it says zero on TV zero's to the bank right yes that's that's correct so so that um that allows the bank to borrow you know money but not the consumer so that's talking about strictly the bank and what they're what they're able to do um and more specifically the uh the Federal Reserve right and so uh but no that has absolutely nothing really to do with the consumer um but the rates are historically low uh as as we've all known but um no you can't there's absolutely no way a bank is going to lend you money without adding interest so pretty much so when they they say hey the Fed cuts it to zero percent interest the consumer just expects that their interest is just gonna go down because now the bank's like okay I can give it to you at a lower interest rate and still make a profit correct right right but that yeah yeah but you ain't getting zero play no you're not getting that you're not getting that 0.5 now here here's here's the thing here's the thing so on a loan modification depending on uh who the investor is that loan modification interest rate can go as low as 1% it I've seen it as low as one percent however they may do a 40 year mortgage on you right so if you think about that they're actually going to make money you you'll either be paying this off through your through your kids or grandkids depending on how old you are or you're going to be forced to uh you know sell at a at a price that you you probably don't want because you're you're probably so far upside down.
SPEAKER_02Oh so you're saying 1% interest yeah 1% interest but they may extend the terms out for the years.
SPEAKER_01Now I mean I'd sign up today if I could get 1% interest with a 40 year and but I just can I pay extra each month and then oh yeah without penalty that's that's what I would do that would be perfect.
SPEAKER_02Yeah um but you know that that doesn't happen that often but I I have seen I've seen quite a few at at a 1% on a modification. And folks Chris Henry will get you that rate I can't I can't guarantee that but I have seen it 40 1% at 40?
SPEAKER_01I would do that too many extra damage dang that's crazy a lot of catches involved though. Yeah yeah well it there there is a lot of um there's a lot to that uh structuring that loan in that way I mean it just kind of depends on the value of the home how far the person is behind you know I mean I've seen loans that literally were 89 months past due eighty nine months not days eighty nine months uh past due and actually got modified yeah so and again that that that's depending on the state the value and and all of that so see I started hearing about those long loans 40 years whatever or more loans from my friends in California because it's hard to buy a house out there. So they had to spread it you know even farther just to be able to afford some affordable payments.
SPEAKER_02Right.
SPEAKER_01Yeah and and we've seen those I've seen a lot of those in in California um New York too uh as a matter of fact a New York loan was a loan that I actually saw that had that uh 89 month uh past due that actually got modified wow and now um and car loans I've seen like that it's real common now I've I've seen buddies get seven year car loans yes yes do they go farther farther than seven years no I no I've seen that that's as far as I've seen on the car loan side so I'm like if we start getting these loans for like you know seven years for a car or or more or in a house 40 years or more why don't we just why don't we just rent these things man it's just like you're renting it forever. Right. You know that truck ain't gonna be working after seven years.
SPEAKER_03Exactly definitely not after five years it's falling apart man so so okay this is uh I guess the big subject everybody wants to get into because you work on the inside of the loans and getting everything coming down what what
Predicted aftermath of coronavirus on real estate
SPEAKER_03is the aftermath of this corona like I know you're seeing changes there they're talking about changing up mortgage what could you see as the aftermath after all this is done the coronavirus you know we're coming out from under our stairs as I said what could you what do you see as the aftermath of it well depending on how long it lasts um that's gonna determine the aftermath um let like we were saying earlier on the show if if we don't see a taper off by mid-April at least by mid-April I think the entire economy uh is going to suffer and the housing market would take a huge hit um now on my side modification side we're gonna be extremely busy as a matter of fact we're already you know ramping up uh as some of the the loan processes have uh originations have kind of stalled or or tapered off I mean they they're not extremely slow um but it it hadn't been on fire like you would expect especially hearing the news that uh you know interest rates have been cut to zero basically so um but I I think if we don't see a taper off I think I think the entire economy in including the the real estate market is gonna take a a a hit how about you Steve what you think the aftermath of the corona is the aftermath I think a whole lot of rich people are going to get a whole lot richer from all this I believe that too I agree with that I do agree with that it it always happens and there are always people in the know and it's crazy I I call we don't have capitalism here we have crony capitalism so the the rich people you know they put in the guy their guys in power the guys in power you know do special stuff for them and and believe that a lot of these rich um rich people investors or whatever are going to get um paid off by the government on that on those on that three uh six trillion dollar handout they're about to do yeah but you know politics aside it's and then and one thing I was hearing like a lot of these um congressmen and senators started having these closed door meetings saying this this uh coronavirus is coming this way and this is what's were probably gonna happen so y'all should probably start selling your stocks now before they tell and then they go tell us everything's fine you know this is nothing this is a hoax whatever they're selling us yet they're selling their personal stocks because they knew this shit was gonna hit the fan and so they're fine they're dandy they made all these record profits and stuff but that's just uh it's the little you know the little people that gets crushed in all this you know so that's just my little political rant right there my uh I talked to my guy Jabron earlier and he Jabron you know Jabron's funny but he uh he said something that was kind of interesting to me he was like he was like I think he's this is what he this is what his opinion was and I actually agreed with it he was like I think the he said this might sound a little insensitive he said but I think the government is gonna be like is going to look at the numbers of what the economy's doing to what coronavirus is doing and if ain't enough people dying from coronavirus they're gonna be like look we got to get the economy moving again you know what I mean uh I I and I was like man I could see them doing that you know because it's like yo if people ain't just falling dead on the street like you know they boom corona and I'm out you know what I mean you got to create like Ebola yeah because right now we like I think Steve you said earlier man economy already gone it's down you know what I mean it's it's you know it it's people taking a hit you know so I don't know it it's interesting I think I could see the I could see the government doing that you know and and to you know like I said earlier uh prior to getting on the show uh it's kind of like you know if you ever play stocks especially penny stocks I don't know if you guys are familiar with that at all uh but when you it's kind of like a a shakedown you know you you're shaking out the weak hands and I think that's part of what is actually going on too is you know booming economy everybody's becoming a millionaire overnight through you know FBA uh short-term rentals uh they can't slow down the the the little guys you know uh they they just can't seem to wrap their mind around how these people are creating wealth uh so to speak or or becoming a better you know financially uh positioned individual uh let's do something to shake shake shake some weak hands here and see if they can they can navigate through this so that that's that I was thinking that same thing like because everybody's former case was getting pretty fat and I was thinking these rich people are like man how can we get our hands on that money right what are they doing with all that money they found a way to get their hands on our money man that's crazy and that's one of the things I'm like you gotta find out other hustles or other other investments.
SPEAKER_01They can't just blindly give your money to Wall Street man that crooked is exactly yeah yeah yeah I totally agree I totally agree so it's good to have it's good I still think rental properties is the best way to go me personally because I mean there's the like you like we were saying they don't want the keys back they'll do all kinds of modifications this and that and if you can get some good renters in there man you could just you know you know get to the point where it's paid down a lot you know or paid off one day you know I was thinking man if I had three three of these paid off rentals man that's I'm making like um five thousand a month you know cash flow and that's today's money I'm sure you know in future money it'd be more like 1000 a month right so I'm like man that you know I just this just thinking of the whole um forbearance thing and I was like wow man so people that have paid off houses are making this much cash flow a month you know that's nice that's nice that's real wealth right there yeah sure and I so because like uh because I've been like I I I've been doing pretty good with the whole throughout the whole coronavirus thing I have a short term that's doing well like the ones I'm responsible for my short term I just had someone book for a month and they stay in a whole month I'm like I'm good till the end of April but then I was like man I but I do have a corporate rental which I hear I haven't talked to him yet now I need to hit him up tomorrow and I ain't he ain't I ain't had that uncomfortable he hasn't brought to me that uncomfortable conversation hey I lost my job or nothing so but I think that's something people got to start looking at like man you know I ain't had that happen to me yet and I'm like man blessed that they still out there rolling and that's one good thing I would say about corporate rentals you know those people like especially traveling nurses right now they in high demand you know they pay four thousand dollars to go to Washington DC right now you know so you know it is good it's a good it's a good thing to be in the corporate space and uh one thing I learned was um you should definitely be a corporate rental business and then use Airbnb as just your vacancy as a gap filler you know so yeah man I don't know Steve you you haven't had that unfriendly uh text yet have you unfriendly text um no not unfriendly that uncomfortable text uncomfortable text I've gotten a few and I'll be like I can see who it is I'm like oh man I open it and it's like and it's it's been it's been cool so far. It's been cool so far. One of you know one of my renters they um they do like you know carpet cleaning and house cleaning so they're in high demand right now they're working like crazy people want their houses cleaned and um another one is like a preacher at a church and I think he's probably salaried and stuff so he's pretty good. Oh but they get paid every Sunday and then the other one you know she kind of make her money off on the internet so I don't I don't know how she makes her money on the internet but she like I said everybody's staying home everybody's staying home right now so she might be in high demand too hope she don't listen to this show. Your winner's still getting bread we sell I it's it sounds like they're all pretty good right now having had the tough conversation she plays video games for money okay that's that's the story stick to it um okay um let's get this back on track uh chris henry um do you have do you have any rentals of your of your own no I don't have any rentals um I've you know wholesale you know houses but I hadn't bought any rentals I've been you know I've been following you guys and wanting to you know prick your brains on on how to get in the space but I think right now I'm gonna hold off for a second.
Is now a good time to buy rental property
SPEAKER_02That's what I was thinking I was gonna ask you you think being in the industry is it a good time to buy is opportunities right now well um not right now in my opinion I think um if you're patient and just wait just a little bit because uh it right now the real estate market hadn't actually taken a hit so to speak and I'm talking about taking a hit in terms of value you know the you know the value hadn't dropped yet um we won't see that until we know which direction we're going to be able to go as a country. Is is is the deaths or the cases tapering or is it continuing to accelerate? So that's the reason why I think that by April the sixth um we should have a pretty good feel for where the market can go and and probably predict what what's gonna happen uh even in the real estate space.
SPEAKER_03That was a good question too. That was my question too.
SPEAKER_01Yeah, I mean, it would be a risk, especially if you have other mortgages if you're going to take on another mortgage, you know, at this point.
SPEAKER_02So there's a lot that's actually going on where people are still making money. Like they, they, you know, they're making money to buy a house, right? And to move and do this and that. You know, certain industries are continuing to thrive. Um, there are other businesses where people depend on, you know, their waffle house, you know, some people may be, you know, a manager. I I think Panda pays their um store manager like, you know, 60 grand. I mean, that's not a lot, but that's you know, that's that's decent enough to to pay a $1,500, $16, $1,700 rent or mortgage, right? And so those people are the ones that I'm talking about that could uh could suffer the most if we have to continue to do social distancing.
SPEAKER_04Man.
SPEAKER_01I would suggest one thing that um right now it's gonna be a lot of like if you want to do some upgrades to your houses right now, if you want to, I don't know, put a patio or do some flooring or something. These guys are like they're like really um scared, you know, they're they're giving good deals right now. So hit up your guys and you can start getting you can start making your houses, improving on your houses right now for for like pennies on the dollar. That might be a better route than going buying a whole new one.
SPEAKER_02That's that's correct. Uh, and I agree with that. And I can see that being uh, you know, an alternative uh to uh to to hedge against what could be. So the the crazy thing about this is that no one literally knows uh what the future holds because no one has been able to uh no one was alive a hundred years ago or 102 years ago. So no one can tell by experience what they did in the economy in order to overcome what happened 102 years ago. So that's a long time, yeah. Yeah, so it's it's been uh a learning curve for everyone uh in the in the world so so far.
SPEAKER_01Right, right. One thing one of our one of our previous guests, um, the millennial millionaire, um he came on our show, he was talking
Room-by-room rentals as recession insurance
SPEAKER_01about because how he he likes to get big houses and then make each room like its own apartment unit. Right. And so I thought that was cool, especially in recessionary times. People can't afford to rent a bigger house anymore, you know. Hey, they gotta live somewhere. So if he has a big ass house with a decent mortgage, you got a good deal on it right now, but you know how to you you got your guys and you know how to modify it to give each person their own bathroom, their own whatever the net, man, you could probably make some good money right now doing that.
SPEAKER_02Yeah, now that that's a real um creative way to uh stay above when when things are going underwater. So that that's a real creative way to do that.
SPEAKER_03And I'm happy you because Chris, you said uh you didn't know about hopping into short-term rentals right now. And it's funny, I was talking to um one of our past guests earlier, and he was saying he had hit me and he was like, Hey, this dude just gave me a 20-package deal, 20-unit deal of his Airbnbs. It's like, look, I'll give you 20 of my units. And like first thing I asked him, I'm like, if you take on 20 units right now, you gotta be it's a 100% reserve play because you probably ain't gonna make no money right now. You might make a little money, you know what I mean, but you you better have your reserves packed. He was like, Man, hell no, I ain't got reserves for that. So I was like, Yeah, man, you gotta you might not want to pick that up, you know. So I could tell you this. Let's say you had the 20 units and you could pick them up and you had the reserves for it. I think depending on how long this thing lasts, you might come out making some bread. You might be making well over six figures a year, you know, off that, you know. So it I I think you can get in right now if you can find people that are struggling with their units and want to sell their leases, like with arbitrage route, but you gotta the only scary part, the only unknown factor, we don't know how long this thing's gonna last.
SPEAKER_02Right.
SPEAKER_03And see, that's and I also yeah, and on the back end, I told them if you maybe if you got in a contract with like a traveling nursing agent or a traveling doctor agency right now, then picked up the units, and then they putting people in your place for you, that could work too. So it's about creativity. What would you say?
SPEAKER_02That's that's thinking outside of the box, yeah.
SPEAKER_01Yeah, definitely. Whatever you do, if you're gonna read short-term or corporate, put in a policy, BYO TP. Bring your own toilet paper. There still ain't none out there.
SPEAKER_02Still the shelves are empty. Hey, quick tip for those that may be listening, and I may be uh shooting myself in the foot. Um in the DFW area, you know, we do have a lot of small um supermarkets, uh Indians, Indian-owned uh places. You might be able to find some toilet paper from there now. Just saying.
SPEAKER_01I've heard that. I've heard that.
SPEAKER_03Yeah, I ain't gonna lie. I have a secret, I have a little secret connect on toilet paper. I ain't had to use it yet. I haven't connected it. I haven't had to use it because Walmart, you know, Walmart now they have a toilet paper guy on the aisle, man. He gotta pass out the toilet paper, man. Yeah, I'll be Steve been on Facebook, but no, I I went over there and they was passing out toilet paper. There was one more left up there. I was like, oh damn. So I start coughing, man. I start like doing coughing. Man, them people got the hell up out of there. I got the last toilet paper, man. They cleared out the aisle, man. They was like, oh, we gotta go. So yeah, man, but yeah, I ain't had to use my toilet paper connect yet. But yeah, it's uh they they you should be able to get toilet paper. They they gotta hand it out. They hand it out like it's crazy, man. This one dude, I was I was checking out, and this one dude had two um two things of toilet paper. But like, and he was trying to check out, and the lady was like, hey, how'd you get that? He was like, Well, one of them was just sitting on the shelf, and they like snatched out of his basket, like, no, you can't take it. And they gave it to another guy. Like, they can't he can't have you can't have no more than two.
SPEAKER_01Than one, apparently. He had two, right?
SPEAKER_03Yeah, yeah, two. You can't have more than one, my bad. So yeah, you can only have one uh toilet paper stack, man. I was like, damn. But I'm I just don't get it. I'm like, man, y'all crazy out here, man. Yeah, man.
SPEAKER_01It's just that panic mentality.
SPEAKER_03It really is, you know. We were talking about that, you know. And after this pandemic, we don't know what's gonna happen because that's fear, fear does a lot to people, man. It will fear does create action. It might be irrational action, but it's gonna create some action, you know.
SPEAKER_01I still I still got access to um at my job. You know, thank goodness I still got a job. But um, they have that that toilet paper they give us, it's pretty much like 30 grit sandpaper. Got wood chips in it. Yeah, so I can push comes a shot, I'll bring that shit home.
SPEAKER_03Yeah, like I I had no problem getting it though, but yeah, that's why uh they got it at Walmart, the toilet paper guy. I said you gotta go talk to the TP guy.
SPEAKER_01You just slip him a slip him a tin, you know. Can we hook hook you up? Man, oh man, it's been a good interview, Chris. Man, we we appreciate you hopping on. And so people could um, I mean, people you can hook you can
Chris Henry's transition from wholesaling to buying notes
SPEAKER_01help people out with their modifications, huh? Yeah, yeah.
SPEAKER_02Um, so even if we don't uh service the loan, um if you wanted to you know pick my brain on what you think you should do, I mean, feel free to do so. Um, you know, I'm on Facebook, Chris Henry, uh, I'm on uh Instagram, it's Chris Hen05, and I'm on Twitter, Chris Hen05. Yeah, gotta be. Um you know, I will interact there, um, but yeah, I I've been doing this long enough to know um what to share with someone if if they're in trouble uh in terms of loan modifications and and forbearances.
SPEAKER_01Nice, nice, yeah. Yeah, you're giving us a wealth a wealth of information here because I I'm thinking twice about doing that, because yeah, that's that's a big old balloon payment, man.
SPEAKER_02Yeah. No, it's it's definitely not to scare you, not to um, but it is to you know alert you and make you aware of what uh you have before you. So uh I'm glad I was able to get on and and add value to you guys and your community. So yeah, no.
SPEAKER_01Okay, what what is your what are you looking to get into? I mean, you said you were thinking of doing some short-term corporate.
SPEAKER_02Well, um I like I said, I've been following you guys, and uh when you follow people like that, you you almost can't help but to at least see what it's about, right? But like I said, I've been a wholesale, you know, I I wholesale uh houses, but I'm transitioning into um buying notes. Uh nice and so yeah, so I've been uh I almost had a deal actually in Memphis on note buying, uh, but the terms just didn't work out for us the way we wanted it to. Um Seller was kind of holding back some information until we dug deep into how he structured it, structured his his loan, and uh it just didn't add up. So uh, but yeah, so me being in the mortgage servicing space uh for as long as I have, it just only makes sense for me to get involved in notes because I I know how to modify if I have to. So I know how to how to structure the loan too.
SPEAKER_01And plus you get the the pick of the litter, right? Because you get to see all the good ones first.
SPEAKER_02Yeah, yeah. So um, so that's that's one of the reasons why we're transitioning into notes.
SPEAKER_01So I I see I see you you're talking about doing wholesaling and then doing notes. So it's two like um like smaller risk, bigger reward type deals you're into.
SPEAKER_02Correct, yeah. Because see, even if uh with the notes, because you control the paper, you know, if they go to foreclosure or whatever, you have to evict. I mean, now you got a a collat, you know, collateral, um, and then you can just do whatever you want with the house. Uh, but in the meantime, you didn't all during that time, all you did was collect the check.
SPEAKER_01Nice.
SPEAKER_02Yeah.
SPEAKER_01Yeah, it's not like having renters and you gotta go fix crap and fix the toilet and stuff like that. That's that's intriguing. There's gonna be a lot of notes popping up pretty soon, I would think.
SPEAKER_02Oh, yeah, yeah. Um this might be prime. I I may be giving out a little bit too much, but that's all right, though. No, it'll be it'll but no, it it should be more than enough for everyone. I mean, you could pick up probably from my understanding, if you get about 30 to 40 notes, I mean you you could you could have a residual income of uh upwards of 120 grand. But you have to know you you just have to know where you want to be, um and what markets are good markets in order to to literally have that kind of uh cash flow. The only other thing to this is it's it's slow. Yeah, it's a slow process.
SPEAKER_01Okay. And you earlier in the show, you mentioned that um that you know you gotta let these let these um uh what's it called these the the bank let them know that you know this information about you know about the about the forbearance, you know, to hop back into that real quick. Um could you just tell our listeners real quick what what questions should they ask you know the banker while they're while they're talking about going through forbearance, what questions should they ask them and what should be well the the number one question that they may not um answer right up front uh is the clear-cut um process of the of the repayment.
SPEAKER_02Um that's that's the number one question. Because oftentimes you you're gonna have a conversation and they're going to give you what they want you to, I mean what they want to give you. Um in order to get the fine print, you're gonna have to get an application. So uh and if they don't if they don't know what to say, uh talk to talk to another agent. Call back and talk to someone else. Um if they don't dispel with you or let you know up front because they may not even know, or they hadn't taken the time out to learn this from upper management or the the the policies and procedures, um, then call back and and try to get another person on the loan.
SPEAKER_01That's good advice.
SPEAKER_02Yeah, because again, it it is going to ultimately boil down to uh who's the investor on the loan. So some policies may be a little bit different if it's not a Fannie or a Freddie uh bag loan.
SPEAKER_01Good advice, good advice. Yeah, um, yeah, I'm gonna have to do that because I you know it's funny because me and Mike, I told Micah about this this thing, and um, and so I said, Well, yeah, you just call them, you just tell them you want the thing, the the three-month forbearance. They said, Okay, starting day one right now, and they get you off of the auto pays and everything. I said, Wow, that's pretty easy. But then you get the email with all the stuff you gotta fill out, you know, all the forms. And then it says you have your own um house preserv home preservation specialists. And so, and it's a yeah, because I had I had asked the girl a bunch a bunch of questions, the one the original, the original girl that was helping me, and she didn't have hardly any answers. She didn't know about interest, she didn't know about whatever payment, paying back. She she said, Oh, it might be information on the the forms we're sending you, plus, you know, and and now you have your your per you know home preservation specialist to talk to. I tried calling, you know, I was on hold forever, and then I just left the voicemail that was two days ago. So they're pretty they're pretty busy right now, I would assume.
SPEAKER_02Pretty backed up.
SPEAKER_01Yeah, so that's the thing. So if I do hit her up, I'm gonna ask her all these questions. I appreciate it so much.
SPEAKER_02All right. Yeah, and you're welcome, man. Thank you guys for having me on. I'm I'm glad that I was able to uh add value to you guys. And um, you know, who knows? I might be back on in a week or two if if things continue to go the way they are and and the you know the the market mortgage uh space change and I'll probably be able to add some more stuff to to you guys.
SPEAKER_01Cool, man. Yeah, we pre- yeah, man. This is uh yeah, you help you've helped us, you've helped me out personally a lot because I did I didn't know all this. I just got a text from Micah, hey, hold off on hold off on that forbearance. You gotta you know, there might be some some catches to it. And then we then I said, well, good get us a banker on or get us uh get us a loan specialist on. And and he said, Oh, I'm gonna try to get you, and when you got you, I was like, man, that's perfect. You know, I love I love this platform because we can not only can we find out answers for ourselves, but we're helping helping out our fans and and listeners too. So yeah, yeah, we appreciate it. And so, yeah, so folks can hit you up and and and get get their you know get their questions asked and then get their journey started.
SPEAKER_02All right, sounds good.
SPEAKER_01The famous Chris Henry.
SPEAKER_02So I'm gonna blast this on everything and hopefully we can help people out.
SPEAKER_01So cool, man. Any more questions, Mike?
SPEAKER_03No, that was it, man. Definitely thank you for coming on, man. Because yeah, me and me and uh Steve had been on the phone with Well Spargo, uh, you know, trying to uh save, thought we was about to save some money.
SPEAKER_01We got to go to Vegas, yeah, for real.
SPEAKER_03For four dollars.
SPEAKER_02Yeah, don't yeah. If you save it, don't blow it. Keep it and pay it back.
SPEAKER_03Yeah, so uh yeah, man, that was Chris Henry uh coming at you. He gave you all the information on loan forbearances, loan modifications, everything you need to know about
Recap and final thoughts on forbearance strategy
SPEAKER_03it. Uh, you can hit us up at on Facebook, Instagram, Twitter, Let's Live Let Thrive. Hit us up, YouTube, leave us a comment, subscribe, all that good stuff, man.
SPEAKER_01Hit up Chris Henry, get your get your yeah, get your loan right.
SPEAKER_03Yeah, if you in this DFW area, hit up Chris Henry, man. Get your get your loan right, don't lose your house.
SPEAKER_01And you do uh you do um new home loans too, or just my no, just just my just servicing. Uh okay, cool.
SPEAKER_02Just servicing. But I I know a lot about the originations, but we only sp you know work with um servicing the loan.
SPEAKER_01Awesome. Yeah, all right, man. This has been a great episode.
SPEAKER_03LLT is out. All right, peace.
SPEAKER_01Later.
SPEAKER_03So after learning all that, man, damn, like, oh yeah, yeah, we got the new LLT gear. We gotta get that. We gotta get that. Matter of fact, because I got some gear to give you. But um, so we're after learning all that, you know, because I called Wells Fargo and I was ready to hop in, but I was like, the lady just made it seem too easy, and I'm like, man, hold on, there's a catch to this shit. And I'm like, let me call. I don't hit up. I posted something on Facebook, and man, I just started getting loads of replies. They were like, oh, well, they'll do a crude interest, they'll do this. And so Chris was like, Hey, I I've been doing this for eight years, so yeah, I think I'm gonna hold off myself, man. How about yourself?
SPEAKER_01There's nothing for free, especially, yeah. I mean, I don't see a benefit to it if I'm gonna have to pay it all off at the end, anyways. You know what I'm saying?
SPEAKER_03Yeah, and and I'll talk to Jabron earlier about it too, because he he had some information. He was like, Yeah, man. He was like, You have to think like this, you can't outsmart these banks, man. I was like, Yeah, yeah, that's a good point.
SPEAKER_01So now if I was planning on selling selling one of my houses, I would do it. Yeah, that would give me a three-month buffer to put no payments, you know.
SPEAKER_03Yeah.
SPEAKER_01Then I could like, if it needed, if it needed work done, the money I would be spending on the mortgage, I'd just I'd be putting in, you know, fixing this, fixing, fixing the bathroom, fixing whatever it needed. And then, yeah, that makes sense then, because then you sell it, you don't ever have to pay that that forbeared money back, you know what I'm saying?
SPEAKER_03Yeah, that's true, man. It it's way I think it's ways to make it work, but you just gotta be creative, you know, and willing to take that leap. So, but yeah, that was a good app, man. And uh, yeah, I'm definitely holding off. You know, uh, been blessed so far, you know, um, with everything.
Diversifying income streams and weathering the storm
SPEAKER_03Uh still working, still business is still operating. Uh, you know, I ain't took huge hits, but uh I did take a couple of hits, man. So like my times, the timeshare, they just straight closed one of the you the whole building, and like I had guests in there. So like they put the guests out, but they weren't tripping. They were like, hey man, we already know what's going on. It's a pandemic, and they you know, so we refunded them the rest of their stay. So it was it was pretty, it's getting crazy out there, you know. Because I think we ain't really looking at it in totality. It's a lot of people out there without jobs right now, man.
SPEAKER_01You know, that's it that's the thing. I mean, I guess we're at least we're fortunate enough to have jobs. Some some of these people that we especially people we interviewed on this show, uh that's their or that's their their main their only source of income is Airbnb. I mean, they're making a killing off of it, but man, they didn't have they don't have no job, they don't have no other it's all 100% Airbnb. So, I mean, if this teaches you anything, you should you should diversify. I don't know if you should have a job, if you don't want to have a job or part-time or something, or have some kind of other hustles, but yeah, put your eggs in in one basket, man, it's it's very, very dangerous.
SPEAKER_03Yeah, it is. It's anything. Yeah, you definitely can't uh have all your eggs in one basket out here, man. It's uh dangerous game, you know. And I I think a lot of Airbnb hosts might have got caught with their pants down, you know. I think, you know, and uh, you know, I just think they, you know, I think people who are Airbnb dependent, and it starts to start to crank up on you when Airbnb start laying their hand down, you know.
SPEAKER_01So you know, you know, it was something I I thought of. It was funny because I watched um uh Jay Massey's show after all this stuff hit. You know, he started putting these episodes out and answering the questions from the from the listeners, from his you know, followers. And um, he's talking about, okay, man, this is this is um this is uncharted times. You gotta do, you gotta start slashing wherever you can slash. He talked about you know cutting Netflix and cutting whatever you got, whatever serve, you know, little things you got here and cutting the coffee. He's talking about cutting coffee, you know, just every cost that everything that's not totally 100% vital to your business. And I was like, I was thinking, um, is paying to be part of uh part of a group for a thousand dollars a month, is that vital to their business? I started thinking that he didn't mention that though. He said, Oh no, don't end your thousand dollar a month subscription. Cut that cut that ten dollar Netflix payment though. But you gotta do what you gotta do, man.
SPEAKER_03Yeah, it's getting uh it's getting crazy out here, man. And I don't know.
SPEAKER_01You know what's cool? I mean, I mean I mean uh if you look at look for the silver silver lining. What's cool? Bigger pockets just mentioned the other day, they're putting all their all their books for um ten bucks. The audio And um, I think audio and and then like your phone, you read it on your phone, whatever that is, the PDF and audio. Yeah, all their books and their whole catalog is 10 bucks a book. So that's not bad. If you want to start getting your like you were talking about getting your knowledge on right now while everything is kind of up in the air, start learning some shit, you know. Start learning like home improvement, start learning some things you can do yourself, start learning or start learning whatever. I don't know, you know, the bird strategies, you learn all this shit because then you'll be at least you have that knowledge when it's time to go get back in the game.
SPEAKER_03And this it's a perfect time to do it, too. A perfect time to do it, you know. Um, you know, people people get desperate in these times, man. And they they hey man, I need another stream of income, you know. It's that time, you know. So uh, but yeah, to all the Airbnb hosts out there, I hope y'all surviving through all this. Because I know a lot of people taking hits. I see people selling units, I see people taking different strategies. So yeah, man, I just really hope that everybody's still still thriving. Even the people that do long term, if you do long term, I hope you're thriving too. You ain't got those that uncomfortable call yet, like, hey, I don't got my job no more. You're like, oh snap, I gotta work out some payment plans. So yeah.
SPEAKER_01Yeah, this, I mean, this this event like right here, man, it'll separate the pros from the pretenders, right? Yeah, because I mean, uh hustlers will find a way, man. Like I said, if you have to rent out each room room by room and and do some stuff and and lower the you know, lower the prices a little just to get by. I mean, if you could just weather the storm, you'd be sitting pretty in a few months, you know, when everybody jumped out, you'd be sitting real pretty.
SPEAKER_03See, because that's my thing. And then that's my thing about hopping in right now onto something. I don't know how long this thing's gonna last. You know, this whole corona thing, we don't know how long it's gonna last. I mean, you gotta be willing to take a chance, though. You know, um I uh and it's funny you I was actually asked this earlier today. I was like, does the US have a timeline of when China first started the pandemic to when they found out they had zero new cases? If you could kind of use that as a baseline to analyze things over here, you know, so but yeah, I don't know.
SPEAKER_01One thing, one thing that um I remember the last recession, and I remember because I was in apartments
Negotiating rent discounts during a downturn
SPEAKER_01when that happened, so it really didn't hit me, you know. That's before I even got my first house. But I remember apartment complexes, everywhere was struggling, right? And um, and I remember it was like they were giving away, you know, oh, first month free, two first two months free, plus a free 40 44-inch TV. Yeah, I mean they're trying to get people in to rent, you know, and so they were struggling. So when stuff like this happened, there's a lot of discounts, a lot of sales. And I was thinking to use that strategy when you're trying, let's say you're gonna try to arbitrage, you know, say, hey, uh I it's a great house, you know, I'd love to rent it, I'd love to sign a year lease on it or six months or whatever, or yeah, or a year, but could I get the first two months, you know, first two months free, then I start paying, you know, and then even inform them you could even do your you can even do a forbearance through your bank. Might not tell them about that that balloon payment. I'm just kidding. No, I'll be up front. And um, but but you could even, I mean, if if there's renters out there that are that are like desperate to get these, because they're paying the mortgage and they're paying the electric, they're paying everything. Now, not just like I said, not just the more mortgage in itself, $1,500, probably a lot of these houses. But then they're paying the electric gas, water. I mean, the government's gonna want his water, gonna what government's gonna want the gas bill or go, you know, electric company got to pay that. I mean, that's that's more expense. So if they even just get someone in there to to make that fifteen hundred dollars a month for them, you know what I'm saying, just to pay the note, that takes off another four to five hundred dollars of expenses off their bag, too. You know what I'm saying? So, I mean, you could probably get a good deal on some rent, but just and then hey, work that in. Say, can I get the first month or first two months free or something like that, and then that'll help me weather the storm until I can get some Airbnbs in here. That's just another strategy I was thinking of.
SPEAKER_03That's a good strategy. I mean, people desperate right now, man. And uh, it's funny you said the last recession. I think for the people that's panicking, I think that's a good thing that you said there because I always look at it. Um, I listen to Master P a lot. And he said the reason why recessions and things like that don't scare him is because he was like, I'm from the ghetto. He goes, I'm from the ghetto, but I live in Hollywood now. He goes, I can go back to that. I don't care because I have a million dollars worth of information in my head. I have a million dollars worth of game, so I know how to get back out of it, but I know how to survive in it and I know how to get back out of it. He goes, if you ain't never experienced that and you've and you go have to live like that, he said it'll kill you. So what I did was this whole time during this, I'm like, man, where was I at the last recession? And could I still survive that? And I was like, man, I could, you know, so I'm like, I ain't really worth the worry too much about what's going on, but now I have more information, and we can use this information to not only help other people, but to grow yourself. So, man, so fear, don't let fear lead your way, lead the way, man.
SPEAKER_01So or let fear motivate you in a way.
SPEAKER_03Oh, yeah, you can let it motivate you, but let it motivate you rationally.
SPEAKER_01Yeah, we uh yeah, in a good way.
SPEAKER_03Yeah, because we were talking about that earlier, you know. Fear, fear, fear, and pan, fear can create fear creates panic, and panic does create action, you know.
SPEAKER_01Exactly. And nobody saw this coming. Nobody saw this coming. Maybe, well, the government knew. That's why they all cashed out before our eyes could everything was okay.
SPEAKER_03And that's the thing, like you said, nobody saw it. It's a pandemic, it's uh, you know, and nobody saw it coming, and it's just like you like you like we always say how many times on this podcast, you can't predict the market. Can't predict. You can't predict it, man.
SPEAKER_01And um, and if you let's just say you right right now, it'd be like you have stocks or 401k or whatever you got. Right now it'd be a terrible time to sell because everything's down, right? If you if you're in these um these funds, you know, mutual funds or or VTSAX, whatever you just gotta keep pumping money in because it's gonna come, you're buying at a discount right now. I mean, you just that's why you can't you can't time the market. You just gotta keep putting your money in. Sucks because Wall Street's crooked as hell, but you might as well play their game because it's like the biggest game in town. But also don't just put all your like that's everybody, I mean a lot of so many people at work, man, especially the older ones, they like got wiped out, man. This shit just because they're like close to retirement age, they don't have rent. Ah, I'm never gonna get no rental house. I don't want to deal with fixing a toilet in the middle of the man. You it's not uh it's not a choice anymore. You gotta have other things going on. You can't just rely on Wall Street, man. They'll rob you blinds.
SPEAKER_03Dude, that's I'd be telling people that, man. Yeah, multiple streams of income. Yeah, you're right. It's not a choice, it's it's it's a necessity at this point. Yeah, and then that's what I was thinking about, man. Them people that got white get wiped out, you by a year away from retirement, and then boom, you wiped, bro. All that Robert people say Robert Kiyosaki's crazy, man. I don't know,
Why multifamily investors thrive in lean times
SPEAKER_03man. He says it all the time, man. I can wipe out your 401k. He says it in it all the time, and you know, and you know, the people who are super, I don't want to attack the people that are Dave Ramsey. I I have some Dave Ramsey in me a little tiny bit, but you know, that whole putting your money in in the stock market and just working your whole that shit can kill you, man.
SPEAKER_01So literally, and that and and speaking about Dave Ramsey a little bit, I kind of started seeing a little bit of wow, you know, it would be nice to not be paying to this $5,000 a month that I'm paying toward mortgages. It'd be sweet to one day have you know the renters in place that I'll be making that five thousand a month because the houses are paid off. I'm not saying have all my houses paid off, but I'll have like you know, three or four or five that are all that would be nice to have them. Those ones are paid off, and those are going to carry me in case shit happens. Yeah, and I'll have mortgages on the all the other ones, you know, so I could take advantage of that leverage. But to have a good mix in your mind, that would be you know just to have some kind of safety net, some safety cushion.
SPEAKER_04Yeah.
SPEAKER_03You know who really thrives in times like this? Multifamily investors. They thrive in shit like this. I can go down, I got 50 doors in this one complex, and I was sitting there looking, and that's why I'm like, man, I I gotta have something. Even if you do buy houses, I think renting by room is like the way to go. It creates a multifamily, you know what I mean? Multifamily always wins. Like, you know, and I think that I think that's just where it is, man.
SPEAKER_01You know, yeah, yeah. I mean, but I mean they might struggle too, because like I said, remember they're giving those deals like crazy, man. You know, free color TV and two months free rent and all just to get people in their in their units, and that'll be lean times, but you're right. I mean, it's it's got a bunch of uh units still survive, man. But the only thing with that, a lot of people that that get into multifamily are they don't buy it by themselves, they have it there in it with a whole bunch of other people, so but I know but it's you in leverage.
SPEAKER_03Yeah, it's leverage as long as they paid, they don't give a damn. As long as you you might not bring in more on your end, but shit. If they paid and you it's a long-term place, like you said with the stock, can't pull your money out, it's gonna go back up.
SPEAKER_01You know, yeah, exactly.
SPEAKER_03So yeah, it's a trip while I look at it, man. I just look at it from all angles, man. I was like, damn.
SPEAKER_01So you still looking for your um fourplex?
SPEAKER_03Yes, sir, yes, sir. So I was trying to, I was trying to get it. I think someone bought the one I was looking at. Uh so if not, then I'm uh, you know, not the the house with the apartment attached to it, he listed it again, but he he came down like 50 G's.
SPEAKER_01The one over there in the Viridian? He came down 50 G's.
SPEAKER_03God dog. I was like, oh shit. Yeah, so um I'm thinking about offering like three something on it. So I don't know. I'm I'm I'm I'm looking at different options. I'm just running numbers and looking at different options, and uh, but I'm actively looking, I'm in the portals every day.
SPEAKER_01You're gonna rent the upstairs out again?
SPEAKER_03That that's a possibility because I'm like, man, if people need the housing, I mean it's definitely a possibility. Because I think that's where we're gonna be, people gonna downsize.
SPEAKER_01Yep, a lot of possibilities, man. Gotta look at everything. Yes, sir. Can't be a one-trick pony anymore.
SPEAKER_03Gotta have deal, you gotta have give you gotta have different game, man.
SPEAKER_01Well, cool, man. Great episode. Yeah, good talking to you and and our fans and Chris Henry, and yeah, man. It's a lot of yeah, we give you all a lot of good good information. So go go like us and go um, what's it called? Go um give leave us a review. We uh we appreciate that.
SPEAKER_03Subscribe, like, leave us a review, all that good stuff, and uh hit us up in the comments if you're on the YouTube. So uh yeah, we definitely reply back.
SPEAKER_01I'm still on my break from um all the social medias right now.
SPEAKER_03So you can break from social media?
SPEAKER_01I told you I told you that already, right?
SPEAKER_03Yeah, man. You gotta start using social media for what it's for to make you money.
SPEAKER_01Yeah, man. I just got off of it. I was just, I mean, everything was just negative, negative, negative, negative. The world's coming to an end. I gotta block everybody.
SPEAKER_03But I do block, block, block. If I don't want to see it, but nah, uh uh I'm gonna be able to do it.
SPEAKER_01By the way, if y'all be liking these hats, we're gonna have some on sale pretty soon. So the LLT hat represent. You wear this, it's like gives you power, you know. It gives you like, man, I'm gonna I'm gonna thrive through anything, you know. It's like a talison. It's just like uh, yeah, it's cool. It's flat, it's fresh, huh? My buddy, my buddy hooked it up. That's dope. I like it, man. No, this one's called the trucker hat. He told he said it's the trucker hat, it has the you know the holes to and this one's the this is what Michael wanted. The flat brim. You know, fit it. Fitted. Well, yeah, so we'll so hit us, yeah, we'll be having some merch coming, some merch coming at y'all.
SPEAKER_03Yes, sir. But yeah, thank y'all for listening. LLT is out. Later. Peace.
SPEAKER_00Thank you for tuning in to this week's episode of Live Let Thrive. Be sure to tune in next week for all the latest in the world of Airbnb and all that and kills. Bye bye.
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