Real Estate Investing School Podcast

Episode 131: How to Qualify for ANY Loan with Jeff Welgan

Date: February 12, 2024
Host: Joe Jensen
Guest: Jeff Welgan, Investor Strategist, Blueprint Home Loans

Episode Overview

In this episode, Joe Jensen dives deep into real estate lending with seasoned mortgage strategist Jeff Welgan, who brings over 19 years of experience helping investors qualify for loans across the U.S. Jeff unpacks the wide array of loan products available—from 0% down payment assistance and conventional strategies, to advanced non-conventional and creative loans (like DSCR and cross-collateralization). The conversation is a practical masterclass for both new and seasoned investors seeking to scale their portfolios, maximize leverage, and strategically plan their real estate journey.

Key Discussion Points & Insights

1. Why Leverage is the Power of Real Estate Investing

• Joe kicks off by underscoring the game-changing nature of leverage in real estate versus, say, stock investing—where you can’t “put $50K down on $1M worth of Apple stock.” (01:05)
• Jeff notes, “The lending side of real estate investing is like a Rubik's Cube… Our focus is simplifying and solving problems for investors.” (02:16)

2. Understanding Today’s Lending Landscape & Down Payment Assistance

• Lending markets have shifted post-2022:
  • There are now significant incentives and down payment assistance programs for first-time and returning buyers.
  • Example: Up to 105% financing for first-time buyers (100% of purchase price plus 5% for closing costs; varies by state). California allows up to 105%. (04:17, 06:29)
  • “We have clients buying homes for less than $1,000 right now.” — Jeff (07:01)
• Most of these are primary residence loans (FHA-based), not for scaling fast, but great entry points and house hacking. (07:21)

3. Annual ‘Move-Up’ Strategy, House Hacking, and Owner-Occupancy

• Investors can buy a new primary each year as long as they move in (“annual move up”), allowing slow but consistent portfolio building. (08:30)
• Fannie Mae’s new 2-4 unit program: Buy up to 4 units with 5% down (no self-sufficiency test required, unlike FHA). (09:42)
  • “That just opens up so many doors… you don’t need a huge portfolio for real estate to be a game-changer.” — Joe (09:46)

4. Vacation Home Loans (10% Down) & Their Limitations

• The second/vacation home 10% down loan is a popular scaling tool but has become more expensive (government raised rates and added 4-point costs to slow investors). (12:03)
• Requirements:
  • Must use the home for some portion of the year, not just an IRS “two-week rule.”
  • No partners outside close friends/family, and must fully qualify without rent income (unless the property’s been on your taxes for a year). (15:06)
  • Must be >50 miles from your primary residence.
• “This is not an investment property loan. There’s a lot of misinformation.” — Jeff (13:17)

5. True Investment Loans (15% Down and DSCR) – Scaling Your Portfolio

• 15% down conventional loans:
  • No “second home” restrictions.
  • Can use forecasted rent to qualify immediately—critical for faster scaling. Typically, you can qualify for 2–4 of these per one “second home” loan based on DTI. (16:16)
• The ‘10-loan’ Conventional Loan Cap & Partnerships:
  • Each spouse can do up to 10 as long as they qualify independently.
  • It's worth planning ahead; sometimes tax strategies mean you should switch to non-conventional loans sooner than the cap.
• Jeff’s team does annual and five-year strategic lending/tax planning with clients. (18:36)

6. Non-Conventional Lending Options: DSCR, Bank Statement, and Asset-Based Loans

• DSCR Loans (Debt Service Coverage Ratio):
  • Purely asset-based: “Does the property cash flow?”
  • 20% down if property cashflows, 25% if it doesn’t; no personal income qual needed. Used by intermediate/advanced investors, allows unlimited scaling. (20:39)
  • “I’m not a big fan of balloons… avoid them if you can. Pay a little more for a 30-year lock—it’s like an insurance policy.” — Joe (23:03)
  • Watch out for prepayment penalties (1-5 years common, ask your lender what you’re signing). (26:54)
• Business Bank Statement Loans:
  • For self-employed with little documented income.
  • Approvals based on 12-24 months of bank deposits, not tax returns. (36:53)
  • Down payment: 10% (primary), 20% (investment/second home); rates midway between DSCR and conventional loans.
  • “People in commission-based businesses, 1099 contractors—this is a huge benefit.” — Jeff (38:43)
• Asset Qualifier Loans:
  • For clients with large asset portfolios ($100K–$200K+): approval based on verifiable assets, not income.
  • No cross-collateral required; calculated based on lender’s risk formulas. (41:56)
  • “We’re not putting any type of lien against the accounts.” — Jeff (42:03)

7. Cross-Collateralization & Creative Equity Solutions

• Cross-collateralization is “coming back”—combine equity from multiple properties to avoid large down payments when buying again, but you need significant equity and experience in multiple properties (not for new investors). (48:44)
• Lenders can do “seconds” or aggregated portfolio loans, but terms/risk vary widely and regionally.
• Home equity lines of credit for investment properties are slowly returning, but typically only for well-qualified investors and with higher rates/caps. (53:29)

8. Hard Money, Flips, and Portfolio Loans

• Blueprint offers hard money for fix-and-flip and “fix and hold” investors.
• Experience matters for cross-collateral hard-money approvals, but some products are open to “newbie” flippers.
• Fannie Mae “HomeStyle” loan: alternative for moderate rehabs (better than FHA 203k, can be used for ADUs or pool additions, especially big in California). (55:34)
• “If you know all the different tools and you get with the right lender, you’ll stop missing deals.” — Joe (39:07)

Notable Quotes & Memorable Moments

• “Everybody’s like, how do I find a deal? Well, you have to know it’s a deal, and if you can’t run the numbers because you don’t know what kind of loans you can get, then you’re going to miss all these deals.” — Joe Jensen (00:00, 47:38)
• “The lending side of real estate investing is like a Rubik’s Cube… our focus is solving problems for investors.” — Jeff Welgan (02:16)
• “We have clients buying homes for less than $1,000 right now.” — Jeff (07:01)
• “With this program… we can do units now up to four units with 5% down… no self-sufficiency test like FHA—that’s the big game changer.” — Jeff (09:28)
• “The second home loan… it can only be used in markets where you don’t own real estate—use this program first.” — Jeff (13:17)
• “The earlier we have these conversations, the better. I can't tell you how many times clients have missed out on deals because they weren't ready to qualify.” — Jeff (32:38)

Timestamps for Key Segments

| Topic | Timestamp | |------------------------------------------------|---------------| | Power of leverage & intro to lending | 00:59–02:16 | | Changes in lending & down payment assistance | 02:16–07:01 | | House hacking, move-up strategy, 2–4 units | 08:30–09:42 | | Vacation/second home (10% down) loans | 10:16–15:06 | | Investment loans (15% down), loan cap | 16:16–18:36 | | Non-conventional (DSCR, bank statement, etc.) | 18:36–47:16 | | Cross-collateralization & HELOCs | 48:44–54:24 | | Hard money, fix & flip, HomeStyle, ADUs | 55:01–57:03 | | Jeff’s contact & final wrap-up | 57:22–59:04 | | Final Four Questions | 59:08–65:51 |

Additional Creative & Planning Strategies

• Strategic Tax Planning:

  • Jeff’s team helps clients annually plan tax returns in advance to balance qualifying income with minimizing tax liability. “Find that equilibrium: don’t overpay the IRS, but show enough net income to meet loan goals.” (29:48)

• Choosing the Right Lender:

  • Always ask about a lender’s experience with investor clients and the products they provide. “If you don’t like the answers, move on… not all loan officers are created equal.” — Jeff (40:09)

Resources & Contact Info

• Blueprint Investor Team:
  bpinvestorteam.com (schedule a strategy call)
• Instagram:
  @jeffthemortgageexpert (no underscores)
• Direct Phone:
  949-306-1287

Closing Thoughts

Jeff and Joe emphasize that understanding your financing options is as critical as finding the right property. The more loan products you understand—and the earlier you strategize with the right lender—the more doors will open. Whether you’re buying your first house or trying to scale into triple digits, there’s likely a solution available—provided you plan, stay educated, and build the right team.

“There are so many solutions.” — Joe Jensen (65:51)