Keith explores how real estate investors can use mortgage strategies to build long-term wealth.

Seasoned lending expert and repeat guest Caeli Ridge joins Keith to discuss why debt isn't something to avoid but to optimize, and how negotiating terms can matter more than price. They walk through practical approaches for new and experienced investors, from house hacking to scaling a rental portfolio. The conversation also tackles common myths about qualifying for investment property loans and what really matters to lenders.

Finally, they emphasize focusing on fundamentals—cash flow, risk management, and informed decision-making—rather than fixating on interest rate headlines.

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Complete episode transcript:

Keith Weinhold 0:01

Welcome to GRE I'm your host. Keith Weinhold Some mortgage guidance out there is costing you wealth today. I'm talking about how you can negotiate to get better terms. I'll tell you the exact questions to ask. Then a guest clears up mortgage myths and misconceptions and how you can borrow to win today on get rich education

Keith Weinhold 0:28

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Speaker 1 1:32

you're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.

Keith Weinhold 1:48

Welcome to GRE from Albany, New York to Albany, Oregon and across 188 nations worldwide. You're listening to get rich Education. I'm your host. Keith Weinhold, as we know, debt isn't something to avoid. It's something to optimize. As a real estate investor, I would rather have lower mortgage rates than higher ones, and now you can call me Captain Obvious. Yet there are some reasons that higher mortgage rates benefit us as investors, though they're not as great as the lower rates are I'll discuss some of that today. This stuff obviously influences marketplace behavior. In fact, here we are now, years after rates made their historic surge and nearly tripled between 2022 and 2023 and yet still, 70% of mortgage borrowers have an astoundingly rock bottom rate below 5% today, lower than the ocean floor, and they won't sell those properties. That's just one contributor to the low supply hangover that still lingers. Are today's buyers still anchored to an unrealistic baseline. It certainly reframed how investors think about normal borrowing costs and what that word normal means. My first ever rental property, many years ago, was purchased at a 30 year fixed rate of six and three eighths percent. One year later, I got to refinance a full 1% lower at five and three eighths. I'm happy that I bought one I did because starting year earlier, got all my real estate benefits rolling that much sooner, the leverage and everything else, and when I did that, refinance many years ago, from six and three eighths down to five and three eighths, I was able to roll all of my loan refinance costs into the new mortgage balance, and that way I didn't have to pay anything out of pocket. So financing is negotiable. A lot of investors don't realize that buy down your rate if you want roll the loan costs into the loan amount, like I did. In fact, I would usually rather have a higher mortgage rate and then not have to come out of pocket at the table. I would rather do it that way. Sometimes I take a higher rate and even get cash back at the closing table. So I walk away from the closing table with a property and cash, but yet with a bigger mortgage. And what's the strategy there? Well, with more inevitable Inflation, I want to load up on the dollars that I get now and then make those paybacks over the long term with future cheaper, diluted dollars for 360 months, sometimes I don't have to ask the lender for any sort of favor to get that zero help from the lender at the closing table to get cash back. How do I do that? Well, I ask the seller to give me cash at the closing. Closing table in return for offering the seller full asking price, or sometimes even over the asking price. I have done it the strategy of offering full price or even a little more than the full list price. See, that's often easier than getting a price cut from the seller, and that works great, because getting the closing table, cash is going to benefit you more than the price cut would anyway, in almost every circumstance, and when it comes to your lender, ask them questions that cut through the noise. Now, lenders have to make their profits somewhere and stay in business, but I've asked the question, what's the break even point on this rate buy down. That's something you can ask today. That can be an even better question for you to ask of builders with all of the buy downs that they're doing for you now, most people know about a mortgage rate lock. That's when you're in contract to buy a property. At some point, you and your mortgage company, you lock in your rate for, say, 30 to 60 days, and that way, if the rate rises before the deal is completed, you are protected. You are locked in. But some lenders also offer float downs. That's for if you lock and then rates go lower before you get the deal closed. In that case, you get the lower rate, and now you successfully played both sides, but most borrowers don't know to ask about a float down for larger apartment buildings, sometimes you can negotiate away prepayment penalties or instead a shorter penalty window. The thing to keep in mind is that smallest borrowers negotiate price, but savvy investors negotiate structure. That's what we're talking about here, and that's why you often hear that terms are more important than price. So there's plenty of opportunity here, even if historically low rates is not where today's opportunity lies. Today, we're going to discuss some things about mortgages that most people believe but are just flat out wrong. Also, what separates the borrowers who build real estate portfolios from the ones who stay stuck on property one, let's have a conversation with this week's repeat guest, a real favorite here at GRE for her mortgage clarity.

Keith Weinhold 7:35

Hey, the president of ridge lending group, Chaley Ridge is back with us. We'll get into things like rates and loan strategy shortly, but first, let's discuss some fun. What would you do? Chili, what would you do if you're 35 and have 100k to invest in real estate? What's your first move? Ooh, good question.

Caeli Ridge 7:55

So let's think five years ago for me now I'm 35 what would I do if I had that was a joke for all you listeners, obviously, you know, I think that if I could go back and knowing what I know now, I would probably invest that into an owner occupied house hack using an FHA loan. Probably look for newer construction if I could find it, and I would probably target a four unit residential property. I'd probably put three and a half percent down lowest rates with that. FHA, I would leverage my money, and I would get three other tenants in units...

604: The Mortgage Advice That's Costing You Wealth