Caeli Ridge shares her entrepreneurial journey and her path to becoming the owner and CEO of Ridge Lending Group. She talks about her own real estate investing experience buying over 40 rental properties of her own and also helping tens of thousands of real estate investors build their rental property portfolios with conventional mortgage financing. Caeli takes us behind the scenes. explains the profit model of a mortgage lender and breaks down the various fee structures of how lenders make their money. She then explains the larger eco-system of how mortgages are sold, closed, serviced, and then re-sold on the secondary market as mortgage-backed securities. She then explains why the 30-year fixed mortgage is such a uniquely advantageous product and why it is not offered anywhere else in the world. Caeli then gives historical context about the mortgage lending dynamics that contributed to The Great Recession of 2008 and why The Great Shutdown of 2020 is entirely different with respect to both lending and home price dynamics. She also talks about the “mortgage forbearance” provision of the CARES Act and what to be cautious of when exercising it. She then explains mortgage qualification guidelines and breaks down the criteria for a credit score, assets, and debt-to-income ratio. She explains that qualified buyers can still get up to 10 mortgages (what she calls “10 Golden Tickets”) but shares which guidelines have tightened up during The Great Shutdown. She then talks about how to transfer your properties into an LLC and the legal nuances of which you should be aware when doing so. And, finally, she explains how and why the 30-Year-Fixed Rate Mortgages could possibly disappear in 2021. FULL SHOW NOTES available at www.TheMaverickShow.com Register for a FREE CONSULT with Maverick Investor Group to Learn How to Buy Cash Flowing U.S. Rental Properties at www.TheMaverickShow.com/Consult
Episode #85: How to Utilize Conventional Mortgage Financing to Build Your Portfolio of U.S. Rental Properties with Caeli Ridge
Episode Summary
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About the Guest
Caeli Ridge
Caeli Ridge is the owner and CEO of Ridge Lending Group. She has spent the last 22 years as a nationwide U.S. mortgage lender and loan officer and her company specializes in lending on residential investment properties. She is an experienced real estate investor herself, having personally owned over 40 rental properties across the United States, at any one time. She has worked with tens of thousands of real estate investors all over the U.S. She has helped more families achieve financial independence through real estate investing than any mortgage lender in the U.S.
What You'll Learn
- The new qualification guidelines for your first 10 conventional mortgages.
- How mortgage lenders make money and how to understand their fee structure.
- What you need to know when transferring rental properties into an LLC after closing.
Links From the Episode
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SCHEDULE YOUR FREE REAL ESTATE INVESTING CONSULTATION WITH MAVERICK INVESTOR GROUP
BOOK MENTIONED IN THIS EPISODE
US GOVERNMENT SPONSORED ENTITIES MENTIONED IN THIS EPISODE
APP THAT CAELI RECOMMENDS
PERSON CAELI WOULD LIKE TO HAVE DINNER WITH
CONTACT CAELI (TO PRE-QUALIFY AND REQUEST FEE SHEETS)
- Ridge Website
- Call 1-855-74-RIDGE (1-855-747-4343)
- Email: info@ridgelendinggroup.com
Time Stamped Show Notes
[2:01] Caeli’s Entrepreneurial Journey
- Founding a mobile Japanese Bento-truck business
- Dropping out of med-school and getting into the Mortgage Industry
- Taking over her dad’s family business
- The pros and cons of doing business with family
- The business lessons Caeli learned from her father
- Caeli’s leadership after taking over the
[8:26] How and Why Ridge Lending Chose to Specialize in the Rental Property Niche
[10:27] How Mortgage Lenders Make Money
- How Ridge Lending structures their profit model
- Understanding “origination points” and “par rates”
- Understanding price adjustments for different types of loans
- The significance of “origination points” being tax-deductible
[15:09] How the Mortgage Industry Eco-System Works
- Understanding GSEs (Government Sponsored Enterprises)
- Loan Officers from depository banks vs. non-depository lenders
- Direct Lenders that fund their own loans
- Reselling loans on the secondary market
- Understanding the role of the “loan servicer” and the “note holder”
- The difference with in-house “portfolio lenders”
[21:40] The 30-Year-Fixed Principal and Interest Fixed Rate Mortgage
- The role of Fannie Mae and Freddie Mac in insuring the loans against default
- Why the 30-Year Fixed-Rate Mortgage is so Unique
- The historical origins of the U.S. government subsidizing the 30-Year fixed-rate mortgage
[24:46] Differentiating The Great Recession of 2008 vs. The Great Shutdown of 2020
- Understanding the lending guidelines leading up to the 2008 Mortgage Meltdown
- The impact of the “Dodd-Frank Act” on mortgage lending guidelines
- Higher qualification guidelines for residential rental property loans for the last decade
- How the Great Shutdown of 2020 is further tightening mortgage standards
[37:23] Mortgage Forbearance Under the CARES Act
- Understanding how “mortgage forbearance” works
- Qualifying for mortgage forbearance
- Cautions and potential consequences for using mortgage forbearance
- The length of the mortgage forbearance period
[42:34] Qualifying for your 10 “Golden Ticket” Conventional Mortgages
- How couples can potentially get up to 20 conventional mortgages
- Underwriting investment property mortgages
- Understanding income, assets, and debt-to-income ratio
- The qualification-criteria differences between mortgages 1-6 vs. 7-10.
- The tightening guidelines as a result of the Shutdown
- Qualifications for self-employed people and business owners
- Strategizing with each customer about their qualification strategy
[55:52] Holding Properties with Conventional Financing in an LLC
- Understanding the “Due on Sale” Clause
- Executing a “quit claim” deed
- Why Caeli believes has never the Due on Sale Clause exercised by the bank
[1:01:22] Why the 30-Year-Fixed Mortgage Could Disappear in 2021
- Understanding “Qualified Mortgages” (QM) and “Ability to Repay” Guidelines
- The Dodd-Frank “QM Patch” Set to Expire in 2021
- Trump Administration interest in Privatizing Fannie Mae and Freddie Mac
- Uncertainty about the future of Fannie, Freddie after the 2020 Election
[1:05:06] The Lightning Round
- #1 App That Caeli Recommends
- #1 Person with whom Caeli would most love to have dinner
- #1 Piece of Advice Caeli would give to her 18-year-old self
[1:07:50] Contact Caeli
- Pre-Qualify with Ridge Lending
- Develop Your Mortgage Acquisition Strategy with Caeli’s Team
- Get a Good Faith Estimate with Fee Sheet and Mortgage Rate Quot
- Contact Ridge via the website, phone or email
