Crash Proof Real Estate Investing with Elysia Stobbe

May 16, 2019

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Real estate and investments go up and down in cycles. It’s been 12 years since the last crash. Are we due for another one? There are experts who say yes, and experts who say no. My guest today is Elysia Stobbe. Elysia is an authority on mortgages and financing real estate for first time home buyers and investors. She is the author of How to Get Approved for the Best Mortgage Without Sticking a Fork in Your Eye ™ and the host of the Fork This Mortgage Podcast.

She has over 20 years experience in real estate, investing, and mortgage finance. She is here today to talk about when and why she thinks the next big crash is coming and what to do about it. We talk about using the numbers correctly to make sure that your investment has enough cash flow to make it profitable. She gives tips on finance options and the importance of due diligence. If you have questions about real estate investing, you will love this episode.

You can find Elysia here:

Ask Loral Elysia Stobbe Website How to Get Approved for the Best Mortgage Without Sticking a Fork in Your Eye ™ Fork This Mortgage Podcast

Show Notes

[01:20] During the last crash Elysia learned a hard lesson.
[01:48] It's time to consider what your play is if there is a crash.
[02:30] A lot of talking heads get paid to say that things are great.
[02:49] There are financial cycles. We were due for a correction fueled by volatile mortgage products.
[03:27] They were also mortgage products available for people with poor credit scores and who didn't have a good history of repayment. Adjustable rate mortgages were also a problem.
[04:10] Elysia feels we are overdue for a correction.
[04:48] Think about cash flow when you are investing.
[05:05] Make decisions by numbers not emotions.
[05:23] When everyone is trying to be an investor that is usually the time not to be an investor.
[06:50] There's a lot of information available for the public also take advice from people who you trust.
[07:16] Ask your mortgage professional what they're closing rate is.
[08:04] There are products for investors based only on cash flow. Then there are bank statement programs where we go off of the income taxes. There are many different mortgage products out there.
[09:04] There is even hard money lending from private lenders at high interest rates. Get pre-approved up front, so you know what your numbers are and can have a realistic cash flow.
[10:08] It's important to get pre-approved.
[10:50] Sometimes you can get seller financing at 6 or 7%. This is better than hard money lending at 14%. Look for a local investment group to find these lenders.
[12:05] There are also ways to use your self-directed IRA. Check fees before getting locked into a company.
[12:54] A lot of first-time buyers are getting multi-unit properties.
[13:37] Elysia is a fan of the Florida market. Other great investment options are St Louis Missouri, Dallas, Houston, Oklahoma, and Tennessee.
[14:29] Lower price is lower risk. Expensive properties can require a lot of money to risk to make the same cash flow. Also be aware of state laws and taxes.
[15:49] Consider your exit plan also.
[16:23] Try to get at least an 8% return but shoot for 14%.
[17:59] Elysia's book How to Get Approved for the Best Mortgage is for first-time home buyers but she's also working on a book for investors.
[18:40] The book can help you approach the Lending situation with educated questions.
[19:58] First time home buyers are currently getting priced out of the market.

Links and Resources:

Loral’s Real Money Talks Podcast