How to Time Travel Back to 3% Rates on Your Next Buy

Dave:
Hey, everyone. Welcome to On the Market. I’m your host, Dave Meyer, joined by Jamil Damji, who looks like he’s in a very dark and very… I don’t even know where… Where are you?

Jamil:
I’m in a penthouse in The Mirage in Las Vegas. For any of you that right now are shaking your head, or feeling like that’s very boujee, it is, but let me-

Dave:
It is.

Jamil:
Let me very quickly qualify the boujeeness of it. Pace was also in the penthouse in the Mirage. We’re both speaking here at a summit. However, his costs $1,000 a night, and mine was $200 a night, because I slipped the front desk girl a $50 bill, and asked her if there was any upgrades.

Dave:
That’s all it took?

Jamil:
That was it.

Dave:
Wow. Good tip from Jamil. That’s awesome. Well, nothing beats… It’s so dark where you are. Nothing beats the blackout shades available in Las Vegas. They know that you need to be able to sleep at any time of day, and it looks very comfy for you.

Jamil:
The blackout shades are a double-edged sword, because they are also called podcast killers.

Dave:
Did you have a rough night last night?

Jamil:
Not a rough night, just… It’s Vegas, man, all the things.

Dave:
It’s so much fun. All right, well, we’ve got a fun thing as well to talk about today. We have Craig O’Boyle, who’s joining us to talk about assumable mortgages, which I honestly… I sometimes just group a lot of creative finance together in my head, and it’s so helpful to really understand the differences and nuances between different types of creative financing. Honestly, I didn’t really know that there was a big difference between generalized assumable mortgages and sub two, which I know your buddy Pace is a big proponent of, but I learned a lot. Did you?

Jamil:
Man, the entire time, I’m sitting here thinking, “I don’t think Craig understands just how…” or he does, but he… I mean, I want to help Craig. I want to help Craig so much just shout about this from the rooftops, because this is one of those moments where I say, “O’Boyle, O’Boyle, O’Boyle.”

Dave:
You just can’t wait to blow this thing up.

Jamil:
I think that there’s a massive opportunity here, and I think that if marketed correctly, and if you educate agents in the right way, we could start creating more activity in the real estate market and so many homes that are sitting on the market stale with trade.

Dave:
Totally. That makes a lot of sense. Well, let’s just get into it then. We’re going to welcome on Craig O’Boyle, who’s visiting us and joining from Assumption Solutions. But first, we’re going to take a quick break.
Craig O’Boyle, welcome to On the Market. Thanks so much for being here.

Craig:
Thanks for having me.

Dave:
Can you tell our audience a little bit about yourself? Who are you, and what is your expertise related to real estate investing?

Craig:
Well, I got licensed in the real estate business as a real estate broker in October of 1995. I was 19 years old, so I’ve been in a little over 27 years. I guess the reason you have me here today though is during that time, I’ve sat at many closing table with buyers, and the topic of the assumability of certain mortgages would come up. It hadn’t made sense for a very long time, because rates have been dropping. About early to mid 2022, we went through a pretty big shift in the rate climate, and I started Assumption Solutions with a partner to help people understand and complete mortgage assumptions.

Dave:
All right. Well, very timely of you. Let’s just start at the top. What is an assumable mortgage?

Craig:
An assumable mortgage is the… Well, the only assumable mortgages that exist are government-backed mortgages. FHA, VA, and USDA mortgages can be assumed. What that means is when you purchase a property, instead of getting a new mortgage, you take over the existing mortgage at the existing rate and term that are in place. That was something that hasn’t really existed in the marketplace since the late ’80s, early 1990s. That’s because rates have effectively been dropping during that entire time. We’re now in a climate where rates have effectively doubled in just a few short months, and it makes sense.
The ones that used to be around used to have what they called non-qualifying assumables, which a non-qualifying assumable is just like what it sounds like. Anybody basically could say, “I want to take that over, jump in, and become responsible for it.” Those are all gone. Now, the only assumable mortgages are qualifying assumables, meaning you have to meet the criteria of the mortgage when it was taken out and put in place. We’re here to help people process those in transactions.

Jamil:
Essentially, what we’re talking about is a creative solution to purchasing a property, but by doing it by the book. We’re actually going to notify the bank. We’re going to let the bank… We’re going to say, “Hey, guys, I’m taking over this property. I’m not doing it subject to… I’m actually going to take over this property. I’m going to qualify for the mortgage so that this due on sale gorilla that for me is the biggest problem in subject two is appeased and fed.” Is that essentially, Craig, the way that the audience should interpret this concept of assumable mortgage?

Craig:
Technically, this is… Unless it’s some private financing or something, this is really the only legal option out there for taking over mortgage. When you take it over, it completely releases the seller and original note holder from liability and responsibility, and transfers it to the new buyer.

Jamil:
How likely is the bank to say yes?

Craig:
Well, so in our processing of this right now, the biggest challenge that we face is the servicers really don’t even understand it themselves. They haven’t been doing these. They don’t have departments for these, so we find that we are actually doing quite a bit of education on their side. We see them putting out information that is patently false and incorrect often to both the owner of the curb property, and the potential buyer of the property. So, in processing these, we’re trying to educate them because we actually see a lot of potential liability to servicers for putting out wrong information to people.
Because if you basically tell a guy who’s got a deal, “Oh, this can’t be done,” even though it’s part of the program that was put in place by VA, FHA, USDA as a benefit to those buyers, you tell them it can’t be done, and then they can’t sell their property, or they lose money. Well, I could see an attorney coming along at some point, and filing some lawsuit against them. We’re trying to straighten that out. We’re using a lot of resources that these government organizations actually have out there about how it should work, but it’s a challenge. There’s a lot of craziness out in this right now because it’s new.

Dave:
Craig, just so I fully understand this, assuming a mortgage is basically when the buyer takes over the existing mortgage of the seller. There’s two ways to do that. One is subject two, but the problem, as Jamil pointed out, with subject two is that it’s not necessarily with the bank’s blessing. There’s this clause in most mortgages called the due on sale clause, where basically if the bank catches wind of what’s happened, and for whatever reason decide they want to say, “You owe me all the loan balance,” they can do that. That is within their rights.
Then what you’re doing with these qualifying assumable mortgages is all above board, and so it’s just… It’s like subject two, but it’s a little bit less risky. Is that the appeal above subject two?

Craig:
Well, if you’re the seller of the property, it’s the best thing you can do if you do it. Now, the challenge is if you’ve got a conventional loan, you don’t have the option. If you don’t want to get rid of that existing note on a conventional scenario, then I guess your only option is subject two. But if you’re the seller of the property, and you can sell it, and you can no longer be on that note, it’s a huge benefit. Because if you’re going on in the future to buy something, it’s not going to show up on your credit, on your DTI, or any of those issues, because you have been released.
Not to mention the issue with if the guy that you let take it over has a shady nature, or doesn’t come through on making those payments, and it goes to foreclosure, well, that loss is coming on you, because you’re still on the hook On that note as far as the lender’s concerned,

Dave:
Craig, that’s a great point. As an investor, you often think of the implications as the buyer. But as a seller too, it obviously makes more sense.

Jamil:
What’s interesting is in Canada, which is where I began my journey in real estate investing, they have actually outlawed assumable mortgages. The reason for it is because the banks and the government in Canada have a very, very close relationship. So, it’s safe to say that in the long-term scheme of the bank’s interest, this doesn’t meet the top of the pile. Given that, who are the advocates, or who are the processors for the assumable mortgage? Because I could guarantee that the bank is not going to put out a person, and they’re not going to lend you a loan originator to help with this process, especially if we’re talking about assuming a mortgage that’s 3.5%, where right now, they’re making money hand over fist at six or seven.
What does that process look like, and what army of people do you need to bring to the closing table in order to process and actually create this situation from start to finish?

Craig:
Sure. You’re right, there’s low motivation on the servicer side. The people that approve these existing mortgage servicer is the one who ultimately has to qualify, receive the packet, and process this. Their motivation is not high. A lot of people that we work with and train are real estate agents, because they are on the front lines with clients who have these marketable assets that they’re trying to sell. So, we educate them about the process, and then when they have a deal, where the buyer and the seller’s going to do it, we onboard it, and we process it. We deal directly with the servicer.
A lot of the agents are out there going to mortgage brokers to try and get information. Mortgage brokers, mortgage bankers, loan originators, they have zero interest in being involved in these, because they don’t make any money. It’s for sale by owners with real estate agents. You’re generally not part of the equation.

Jamil:
Who’s going to get greased to make this happen? Essentially, what I’m trying to understand is do I got to pay the loan originator? Do I got to… Do I need to make sure that the real estate agent makes their commission?

Craig:
Well, you do pay us as at Assumption Solutions. We charge a fee to both the buyer and seller to get a completed assumption. The servicers do have the right to collect a fee for processing these. We’re finding that truthfully, on average, they’re somewhere between $1,000 and $2,000. That’s a lot less than a loan originator would collect at a new origination, so it’s lower. It’s not as much motivation, but our company is born out of something my partner did in the last downturn, where he created a company that effectively processed short sales on behalf of a buyer and seller to make a real estate agent’s life easier to get more deals done, and dealt with the servicers to get short sales done.
Now, this is a lot less of a pain point than that. They were getting those done, but I mean, the servicers in those cases, it was like, “How do we limit our loss?” At least in this scenario, it’s like, “We can make a little money. We keep a loan that’s on the books going forward,” but they’re not originating a new loan at double the interest rate, so not a ton of motivation. I think that’s a little bit behind the fact that they don’t have the process in place and the staff in place, and even the knowledge base that is in place to do these right yet.
We are trying to shorten that curve, and make it simpler, but it’s a process that takes, once you start it, anywhere from 60 to 90 days. Now, the short sale process when it was in the heyday, I mean, it could take six to 12 months. We think it’s still better than that timeframe.

Dave:
Because it takes 60 to 90 days, is the type of seller and therefore the type of property that you see go through these transactions, are there unique characteristics about it? Are these distressed properties, or is there something unique about them?

Craig:
You’re actually not going to be able to complete one on a distressed property.

Dave:
Oh, because it doesn’t qualify?

Craig:
If the loan is not current, it’s very unlikely that the servicer will allow it to be assumed. There’s important things that your listeners should know, especially since you guys are all about the investment side of the world. The only people who can qualify to assume these mortgages are owner occupants. So if you’re coming at this from an investment standpoint, you probably need to be looking at, “I’m going to be an investor who occupies and then turns around and goes to an investment down the road after a significant period of time so that that loan is taken over by you as an owner occupant.”

Jamil:
I think the main concept here is that the banks are wanting to make sure that there’s not a straw buyer situation, or you’re not the straw buyer, and saying, “I’m going to live in this.” Then seven months or 10 months or a year down the road, you say, “I changed my mind.”

Craig:
Well, with regards to a lot of those loans, number one, it’s about intent. It’s hard to put a timeframe on intent, but if you are in there for 30 days, and then it’s a rental, I think you could be in some trouble, but a year. I mean, just talking about VA loans benefit to a veteran. Veterans transfer all the time around the country with their orders, so it’s very common to see a guy get a house, VA loan, and then the army sends him somewhere 6, 9, 12, 18 months later, and it turns into a rental. Matter of fact, in my career, I’ve helped several people.
Gosh, I remember dealing with a gal who she was retiring. She was stationed in the Pentagon, and she was liquidating 10 or 12 homes around the country that she had bought everywhere she went, and was netting out a couple million dollars. This was back in probably the early 2000s. The key with regards to assuming is intent, and if your intent is not to occupy that property when you take it over, then you’re in trouble with loan fraud.

Dave:
Well, would this work with any residential mortgage? Could you do this with a duplex or a quadplex, for example, live in one unit, and live in the others?

Craig:
Let’s take FHA, specifically. FHA, you can do multi-family properties up to one to four units, where you live in one, and rent the others out. I actually connected with a gentleman in the Bigger podcast’s… Is it chat area or something in there who had some questions, because he had a property in Miami that he bought it, lived in. It was a fourplex, lived in it and was looking to sell it, and was getting a lot of people interest when they put it on the market, and mentioned that it was assumable. The challenge is all the people that were coming at them, nobody wanted to live in one of the units.
I said, “I look at it this way. When you’re marketing something to sell, it’s one more asset to the property, because when I put a home for sale, I’m marketing all the assets about it.” I’m marketing if it’s got updates like a new kitchen, if it’s got a great lot, if it’s got a great view, and I’m marketing if it’s got an assumed mortgage. It doesn’t mean it’ll sell that way, but it’s one more asset to market when you’re selling something. If you’re buying something, and if you can go that route, why not jump on it and save?
I mean, if you look at rates, your average $400,000 mortgage… I think in November of 2021, the rates were about 3.1%. By November of 2022, they’re about seven-ish, right? The difference in payment is $953 a month.

Jamil:
Over the life of the mortgage, Craig, what I want to really understand and impart to the listeners right now is what is the value of the note, and can I create an opportunity for me as a homeowner? Because you’ve been using some very interesting language when you call the note the asset, because he’s talking about, “I’ve got a renovated kitchen. I’ve got a renovated bathroom.” These are all things that add or force appreciation to a deal. You’ve got 3.5% mortgage attached to your property. Right now, the market says seven. So over the life of this mortgage, there’s a possibility of that gap costing hundreds of thousands of dollars.
So, what is the value, and how much could a homeowner add to their situation by saying, “Look, I’ve got this beautiful asset that I’m going to allow you to take over or assume the language is beautiful. Assume in this sale, but I want this amount of money as a premium in order to allow you to do it.” What’s the value of this asset, Craig? I think that there’s a lot of people right now. The bells are ringing in their minds, because essentially, the retail real estate market is slowed substantially. If you’re a seller right now, and you’ve got an assumable mortgage, now, you’ve got this gorgeous, beautiful essential asset that you can sell to the world.
What is the value of this, and can you rightfully market it in your listing verbiage?

Craig:
That’s a great question. I think the value of the asset increases the more people know about it, understand it. Right now, when I talk to people, my point is that if you’ve got two homes next to each other, and they’re all the same condition, they got the same lot. They got the same view. One’s got this conventional non-assumable loan on it. One’s got this VA or FHA assumable loan on it. Which one should sell for more? In theory, it should be the assumable, because like I said, at 400, you save $900 a month. Although I’m not sure it’s easy to quantify it just that you should list your home higher.
In the market that we’re in, I look at it as you might just be able to sell faster. That means if you can sell faster, technically, you probably sell for more. Because if your home has been on the market for 60, 90, 180 days, you’re likely chipping away at your list price over time. Now, the more this spreads, and the more people start hunting it, the more they sell faster, or you’re able to say, “Now, we can sell these for more, because they’re out there,” but there are a couple other things that make this process a little bit complicated that it is also a reason for me. It’s difficult to say that yes, it’s worth more.
Let’s talk about what we call the assumption gap. You have the purchase price at 500, and you have a mortgage that exists on the property of 450. We call the difference between those two your assumption gap, which is effectively what you look at as your down payment. The big question that I get from everybody is, “Can you finance that?” Well, there’s no guideline with the government organizations that you can’t get secondary financing, but what we have found is, number one, good luck finding a lender that’s looking to jump into a second mortgage position in the climate that we’re in.
Then number two, if you are able to find it, it’s up to the servicer who’s approving the assumption whether or not they’ll allow it. Everyone we’ve been involved with has been a cash down payment to cover the gap. Is there an opportunity there for a second, whether it’s an owner carry, whether it’s all these other things? Potentially, but we’re not out there telling people that that is an easy thing to accomplish, because we haven’t seen it done yet. So, when you have that gap, it does limit the pool a little bit, so you don’t have as many buyers.
Even though you have this asset to sell, you don’t have as many buyers, because if you think of a traditional VA, FHA loan, they’re designed to be low down payment entry points for buyers, for people that use them. Now, what I’m finding is a lot of the people that are going through these, they’re what I call the move-up person, right? They’re selling something. They’re coming out of something. They’re jumping into these products, because of the savings and because of the long-term makes sense. I mean, we’ve even seen…
The best one I’ve seen, the one that interests me the most that we’ve processed that I’m seeing is we have a loan that somebody’s taken over that’s 15 years old. That means it’s half paid down. It’s a low rate. It’s low below what you could get today, but I just love the fact, and the gap is half a million dollars, but I love the fact that a mortgage amortization, it’s so front loaded in interest. Guys jumping in at a low rate, where most of the interest on the loan has been paid. I love it

Jamil:
I mean, essentially, you’re at one of those very unicorn-type situations where you’re paying down primarily principle at this point. If you’re halfway through, and, like you said, the amortization schedule, if you look at any of that, and if you look at the way that those loans are front loaded, it’s sickening. You realize just how much money you’ve burnt.

Craig:
Well, they know most people sell within five to 10 years.

Jamil:
I mean, you essentially are a renter for the first 10 years of a house on a purchase. This is just incredibly timely and what a wonderful way to provide a solution for people to, a, sell their property, and b, as buyers come in and get financing, that is just unavailable.

Dave:
Craig, I’m curious. If you are a buyer who’s willing to meet these conditions, owner occupy… In the BiggerPockets world, we call an owner-occupied investment house hacking. So if you’re willing to do a house hack, how do you look for this? I get that you’re saying that it’s up to the buyer, excuse me, the seller and the seller’s agent to market it. But if I am bought in and want to find one of these, what’s the best way to do that?

Craig:
Our efforts and training with real estate agents, number one, we’re training people how to expose this asset that they’re marketing. In Colorado, Colorado Springs specifically where I’m located, our MLS system has input fields for this, where you can input one that’s an assumable loan, and then details about the loan, the PITI payment, the loan balance, the type of loan, all that kind of stuff. Nobody has used those fields in our MLS forever, so they don’t even know that. A lot of the agents don’t even know… I mean, most of the agents in the country have been licensed less than 10 years, truthfully.
So, we’re teaching them how to put that in there, how to get it marketed. Unfortunately, a lot of the MLS systems don’t pump that section of data out to public fields. I can build a client a search when they’re looking for a property in our MLS system, and it emails them stuff that meets that criteria. So if you’re looking for X, I can send it to you, but then you’d probably have to talk to me to see it, because the visualization of that criteria is not on my client’s side, unfortunately. I’d love to see some changes in that. We’re working on a lot of areas of contact for getting that out there.
Let’s just talk about finding stuff that maybe isn’t on the market that has this potentially. Because we’re training agents to grow their business by finding those, there’s a lot of data harvesting mailing list things that you can scrub for when things sold, what type of loans they have on them. All that kind of thing is out there. But in our local market, because we’ve done so much training, we’re probably the most robust with this in the country. I keep a search open. I can see every day a couple more assumable loans on the market, because in Colorado Springs, we have a huge military presence with multiple military bases here.
Between March of 2020 and March of 2022, we had 14,000 VA loans alone in our county, either originated or refinanced, which means their rates are most likely below 3.5%, some as low as two and a quarter, and that’s one county. So, there’s a ton out there. These products make up approximately, depending on your location, between 20% and 30% of the marketplace. The more military related your community or your area is, obviously, the more you have because of VA there, but USDA, I think, is it’s more of a rural product, and it’s about 1% of the market.
Then FHA can be used by anybody out there. So finding them, you really need to hunt down somebody who has access to real estate listings, but also who knows this product. Like I said, we’re doing education on this all over the country with agents, because we can process these anywhere in the country.

Dave:
That’s super helpful advice,

Jamil:
Very helpful. My mind is just full of so many opportunities that derive from, a, awareness of the availability of your note having this clause in it, and secondly, being able to execute on that. How does somebody in a reasonable way find out whether or not their mortgage is assumable?

Craig:
Well, it’s very obvious if you’re a veteran, and you took out a VA loan, right? Veterans know their benefits. If you were a first time home buyer, and you did a low downpayment program such as 3.5%, you’re most likely FHA. Now, if you don’t remember what you have, usually, you can go to something like a title company, and run an ownership encumbrance report, which will show you the debts filed against your property. VA and FHA are pretty clear on their deed of trust that they’re VA and FHA all over them. USDA, I mean, same. USDA and FHA are almost identical, so same thing there.
If you used a conventional product, and your downpayment when you bought your home was over 3.5%, most likely, it’s not assumable. Now, I do want to jump in with one thing that is important to talk about with VA loans. VA is a veteran benefit. It’s only a loan product that is available to a veteran when they take it out new. However, VA can be assumed by a non-veteran, but there’s something that’s important to know with that. VA’s process for giving loans is determining the level of eligibility that a veteran has available to them.
So, it’s like… You could do it on VA’s website, but it’s complicated, so I can’t… It’s not a dollar amount. That’s not true. It’s hard to say. There is a cap, but your eligibility’s it’s regional based. It’s got a lot of factors to it. But if you let another veteran assume your VA loan, not only are you released from the liability in the assumption, but your eligibility is released as well. Meaning, you can take 100% of your eligibility to get another VA loan in the future. If you go veteran to non-veteran, the eligibility portion that you used in that loan is stuck to that loan until it’s gone.
We see scenarios where for some veterans, they won’t do anything except veteran to veteran assumptions. However, we see some scenarios where it makes sense. The veteran’s just like, “I don’t care.” The big one I talked about, where it’s 15-year old note, the person selling that home is rather up an age. They’re getting a lot of equity out of the house. They’re actually… I believe they’re downgrading in what they’re going into, so they didn’t need to use a VA loan again. We’ve seen scenarios where some veterans are like, “I just need out of the house. I just want it sold. Whatever sells it first, I don’t care. I’m still getting equity, so I’ll go get a conventional loan in the future.”
There is a caveat to that. With the FHA, USDA, there’s no eligibility issues there at all.

Dave:
Awesome. That’s great. Well, Craig, this has been super helpful. I’m curious, do you have any other tips for our listeners just when it comes to assumable mortgage or just navigating the loan climate in 2023 before we get out of here?

Craig:
I mean, the best tip I can have if you want to assume something is it’s really good to have your penny saved up, either you’re coming out of a property, and you’ve got cash to put down, or you’ve been banking some money away. If you’re looking to buy something, why not capitalize on that low rate? That’s probably never going to come back. I mean, unless the government is foolish enough to think that just printing money is a great thing, hopefully they’ve learned their lesson on that. I don’t know. We’ll see.
But if you’ve got some assets, or you’ve got some cash saved, and you’re looking to get into something as cheap as possible that down the road maybe it makes the sense to turn into a rental, well, it’ll cash flow a heck of a lot better with a two and a quarter rate than it will with a six and a quarter rate.

Dave:
All right. Well, that’s great advice. Craig, thank you so much for joining us. For people who want to learn more about you or potentially work with you and your company, where should they contact you?

Craig:
Our company is Assumption Solutions. Our website is assumptionsolutions.com. We have lots of training. We have lots of info. We have lots of stuff that’s good for whether or not you’re a home buyer or home seller or real estate agent.

Dave:
All right, great. Well, thank you so much, Craig, for being here. We appreciate your time.

Craig:
Thank you.

Jamil:
Take care.

Dave:
Jamil, what’d you think? This seems right up your alley.

Jamil:
Oh my gosh, there’s so much right now that my mind is… I honestly feel like I need to call Craig, and I need to figure out how to bring this opportunity to America. Right now, we’re sitting on this massive opportunity, where people are really struggling with affordability. When you’ve got an assumable mortgage, and a reasonable seller, and an educated agent, and a buyer who obviously wants to rewind and go back in time, and get that opportunity-

Dave:
Now, you could do it. You could go back in time.

Jamil:
Yes. The assumable mortgage is the DeLorean of lending products.

Dave:
Yes, it is. Yeah, it’s amazing. It’s super cool.

Jamil:
Yes.

Dave:
I mean, I guess the only thing I was a little bummed about was to hear that it’s only for owner occupants.

Jamil:
That and then, secondly, just the qualification process and the unmotivated nature of the whole process, because here’s the thing. This is where I always find inefficiencies happen is when we don’t pay people, or people aren’t being monetized or being taken care of through the process.

Dave:
This is not incentivized.

Jamil:
They’re not incentivized. So then if you ever work in a situation, or if you’ve ever tried to navigate a situation where people aren’t incentivized, I can help everybody right now understand what that feels like. Go to a government office, and try to do something.

Dave:
Totally.

Jamil:
You’ll see that lack of motivation from everybody working there, because there’s no incentivization. So, that piece, I feel like, is going to create so much clunkiness, or make this more difficult than we might think that it could be.

Dave:
Than it has to be. This seems like it could be easier, and we would all wish that is what would just happen is the easiest thing. But to me, this just seems like tailor-made for people who want to make their first investment.

Jamil:
Agreed.

Dave:
If you have saved up some money, and you’re sitting around thinking like, “How do I get in? It’s expensive.” It’s like, listen, this is for people who want to owner occupy. We all know house hacking is one of if not the best way for people to get started in the first place. You can house hack, plus get an interest rate from a year ago that is going to increase… They said for a $400,000 home, Craig just said that that’s going to increase your monthly cash flow by nearly $1,000. That’s probably more than most people pay in rent currently.

Jamil:
I know.

Dave:
That would be a huge saving. So if you are new to real estate investing, I think that is huge. I think the other main lesson here is through the BiggerPockets conference and a few other things, I’ve learned that a lot of our audience here on On the Market is real estate agents. To me, this is just a goldmine for real estate agents.

Jamil:
Big time. Big time.

Dave:
If you have a selling contract for a qualifying mortgage, this is worth. They just said it’s worth $12,000 a year. For an owner occupant, if this is a home buyer coming in to buy this, they stay on average seven years. Seven times 12, what’s that? $84,000, that’s $84,000 on average that it would be worth for $400,000 homes.

Jamil:
That’s the entire life of the mortgage?

Dave:
No, that’s seven years. That’s the average amount of time people stay in a mortgage. But if they’re going to stay longer, it’s worth even more. It just seems like… Know what you got. If you’re an agent or a seller, if you have one of these qualified mortgage, that is extremely valuable.

Jamil:
I couldn’t agree with you more, Dave. I feel like this is the peacock feathers of a property right now. I think that there’s a massive opportunity, especially with real estate agents feeling the crunch right now. A lot of you might be listening to this, and sitting on a house right now where you haven’t had an easy time selling it. You’ve got a seller who has a terrible situation, and wants to sell or whatever’s going on, and there’s this gap in information and execution. Real estate agents that are listening to this, please do some homework. Get ahold of Craig, and see if there’s an opportunity there.

Dave:
Absolutely. Great advice. Well, thanks a lot, man. We appreciate you being here. For anyone who wants to connect with you, where should they do that?

Jamil:
Well, I’m always findable on Instagram at J-D-A-M-J-I. That’s @jdamji. Also, I have a YouTube channel where I go live and help people underwrite and learn all about the real estate investing that I do, which is a niche called wholesale. You can find me at youtube.com/jamildamji.

Dave:
Awesome. If you have any questions for me, or thoughts about this episode, please reach out to me on Instagram, where I am @thedatadeli. Thank you all for listening. We’ll see you next time for On The Market.
On The Market is created by me, Dave Meyer, and Kailyn Bennett, produced by Kailyn Bennett, editing by Joel Esparza and Onyx Media, researched by Pooja Jindal, and a big thanks to the entire BiggerPockets team. The content on the show On the Market are opinions only. All listeners should independently verify data points, opinions, and investment strategies.