All Forum Posts by: Jacob Thorpe

I've had mainly clients using DSCR loans as part of their scaling strategy especially once they hit DTI or property count caps with conventional financing or prefer to hold in LLC. These loans have been a good fit for investors focused on portfolio growth since approval is based on the property's cash flow rather than personal income.

The loan type has to match to client's goals as some prioritize cash flow and flexibility with DSCR, while others start with conventional for better rates before transitioning. The key has been structuring deals around their long-term objectives. Market shifts have made strategy even more important lately.

DSCR loans are based on the property's own income rather than the borrower's personal DTI, which makes them ideal for investors scaling portfolios or holding properties under LLCs. Conventional loans cap out once clients hit DTI or property count limits, while DSCR focuses on whether the rent covers the mortgage usually requiring a ratio of 1.0 to 1.25. It's a great option for clients with strong cash-flowing rentals who want to keep expanding without their personal finances limiting them. Recently I have seen some lenders going as low as .75 DTI for DSCR refinance on qualifying properties.

As they grow, many use bridge or fix-and-flip loans for short-term acquisitions or rehabs, later refinancing into DSCR or portfolio loans for stable, long-term holds which I always recommend, some lenders I have spoken with will allow for vacancy temporarily immediately after the flip to get out of the high interest bridge loan until a tenant is found. Commercial and small-balance portfolio loans work well for scaling beyond single-family rentals, especially when grouping multiple properties under one note.

 Thank you for actually reading my post.  The original post seemed to be nostalgic which is fine but I did want to shed some light on the changing of the times. 

I am a broker so literally I am a middle man, and almost all of my education has came from podcasts, books and YouTube/e-courses.  Not just for real estate but also for computer programming when I was in college.

This was a matter of practicality as I had no other way to succeed.  As Don had mentioned, this is what guys like myself have to do until we find great financial success in life.  I don't think this cheapens me as a person or cheapens what I provide because I had to go about my life on different terms.  I have tried to get jobs around me with lenders and banks and they simply didn't hire me. I could go a bit into detail as to what my suspicions are but the men who look like me and are from my social / economic class have experienced frustrations in hiring across the board not just in finance. Especially in the tech world. The people I know in Lake Geneva who were born to wealthy parents though are able to walk in and get hired based on their parents connections.  Punching up I am met with road blocks.  That's okay it is to be expected and I don't care but to be perceived as a huckster before examining what I can provide doesn't feel right.

I became a broker because I didn't have to pass any hiring quotas, I didn't have to get the "ok" from a bank or corporation, I can generate my own business without anyone telling me "no you cant participate" or "no you cant do that".  I learned everything I have from YouTube because it was free, and courses were relatively cheap.  Even the podcast bro or the social media guru knows someone who knows someone and by utilizing social media I was able to cast a broad net and talk to lots of different people and soak up as much knowledge as possible. 

I have not been able to succeed using traditional methods, so when reading this post and feeling described as a fly by night huckster who hasn't earned his wings, well maybe I still have to earn my wings, but I am doing all that is within my control and my ability. Maybe after a few years of flipping and building I can get into the country club and get along well with the good ol boys but until then I may only do what I may do within my control and my ability and to have the perception of being a huckster devalues what I bring to the table based solely on how I got my start or what tech I utilize and that feels wrong. What should be examined is what I can provide and what I can do for people.  Not to mention that for me to succeed not only do I have to do the grind like putting in the man hours and , hard work(which is no problem) but I also have to learn a far more cerebral set of rules following AI, social media, self marketing etc. There is a different playbook now to succeed. The game has changed completely and to be on the cutting edge there is nobody you can learn from you just have to do it.  It makes it twice as hard to succeed when being looked down at from guys on top.

In response to your post 

"I am half a decade away from 60" :  Try talking to younger men about their job/dating/life prospects in this new American landscape which has changed dramatically since you were in your earlier 20's and 30's.  You might find an answer to a lot of your questions/thoughts.  I'd recommend truly listening to them before telling them to pull themselves up by their boot straps. For us, walking into an office, making eye contact, and a firm handshake - isn't at all what it takes to find quality employment for a lot of younger guys. 

"I know in any economic system, especially a capitalistic one, there will always be some proportion of people & businesses that don't deal or create anything of any real value." Can you describe 'real value'? What is the 'real value' of the American dollar since Nixon ended the gold standard - it is a fiat currency not backed by anything? Is/was their any value in Toys'R us that made childrens toys? Has there been any value by shipping manufacturing overseas, only to be sold on consumerism? I find more value from crypto, wholsalers and podcasts than I do from Black rock and vanguard or the stock market. 

"Multitudes of people on BP looking to become rich on real estate by "wholesaling" or "rental arbitrage", essentially folks with no money or assets looking to punch their golden ticket" : I feel as though this was made in poor taste.  I know plenty of people working as wholsalers, podcasters, game developers, YouTubers etc and I am glad they're able to do what they do and be paid for it. On real estate,  I am more than happy to work with wholesalers, and have bought many deals from wholesalers.  If there are young men with the ability to drive around all day, find run down properties, speak with the home owner and negotiate a property getting it under contract and getting that contract to me - than I am more than happy to pay their commission so they can spend 8 hours a day building a portfolio for my and other investors review. 

"Dubious, or no value, real estate training courses, books, seminars, etc by people who often have less experience than the people they're "teaching". Syndications that hawk unreasonable returns and unbelievable risks while raking in chunks of fees for the syndicators, sometimes people who have almost no experience or knowledge in the products they're selling. "  : I can't exactly speak to what you're trying to say here, I have paid for plenty of courses, paid for plenty of books and seminars. At each of these purchases I was able to gain knowledge and networking and access to new opportunities. Some were duds and I had felt mislead, but that is the price you pay for knowledge in a dynamic and changing information driven world we live in. Eventually you get good at sussing out what's worth buying before you pay. 

"And that's just what I see on BP. I see it everywhere. I have a grandson who aspires to make his fortune as an "influencer". Making money by getting people to follow his channel, where the only real monetization is due to the fact that legitimate businesses are willing to pay advertising money to place ads where eyeballs will see them. A lot of his friends think that getting a "real job" or creating a "real business" is for chumps. Why would you want to work a real job and save your money when you can do stupid stuff on Youtube, hawk junk products and try to get free AirBnb stays?"  That's good, I am proud to see you're grandson is smart enough to see how the world is changing.  Would you suggest he should he spend four years at a college with the slim chance that might turn into working a company job, competing with H1B applicants for employment, to eventually 20 years later of saving to maybe flip burgers at his own establishment in competition with Mcdonalds?  Maybe he spends 20 years working for a corporation then should he build a machine shop in your garage and start a tool company and compete with Milwaukee Tools? Should he sacrifice 2 or 3 decades of his life in the hopes that maybe, someday, he might "make it" on his own? He has already the advanced knowledge that that worldview your generation was sold on is a lie. The 'system' is not there in anyway to benefit the common working class man and there is no way in hell he alone is going to take on the likes of private equity, corporations, hedge funds - there is no way he is going to out compete indians or the Chinese in the labor market. He has at his disposal a computer (capital) and is using it as a means of economic generation (labor)  which is smart and he has direct access to a community of millions of people by using YouTube (entrepreneurship ability) so your grandson who you scoff at, at his young age, already is understanding the key components to any economic endeavor and he probably learned it from listening to podcasts or watching other content creators. 

It is normal to admit to the alienation you may feel to the dynamic and changing marketplace especially if you have spent decades mastering older more traditional frameworks which are no longer relevant. Economic incentives have shifted away from the skills and ethics you were most likely raised with, and your grandson is adopting what is modern and required for future success. Also, in a world driven by conglomerates and private equity the idea he is going to create anything of value in his garage(your garage since the likelihood of him owning a home without family help is slim) , like a Model-T, are highly unlikely or out right restricted by the government as our world today is also over regulated or over licensed. If he is able to create anything on his own it most likely will be in tech, mirror a 'huckster valueless app' and more than likely the creation will be assisted by AI. If it found any success, its likely he would sell it to a major tech company like Google, Facebook, etc only after he had 'huckstered' the app to early adopters. 

"Today it seems to me that everyone wants to make their money by being some kind of middleman, syphoning money off the interface. When I tell people about the hard work and long hours it took to rehab all the houses in our portfolio, they look at me like I have 3 heads." What was the interest rate on the majority of your portfolio while you did this? Was it pre-2008? This is a place where I can slightly agree with you. The rules are changing but hard work, integrity, and consistency are still virtues that will make all the difference. Although, it will also take the understanding of being your own brand, social media, marketing, sales, AI - the workload has definitely changed. Access to information has changed. I'd challenge you with a Darwinian question and ask if you are putting in the hard work at adapting to a new landscape? what will happen if you don't? Chances are you probably don't have to if you've acquired a massive rental portfolio when loans were at 3% and required no more than a pulse to get them.

"I just find it disturbing to think that a lot of economic activity is just selling nonsense to each other rather than creating products or services of real value." Consumerism has been a driving force behind the economy since you were born, and it continues to shape the younger generation’s spending and business habits. What’s changed is the form. it takes new technologies, trends, and marketing strategies. so it might feel more chaotic or superficial than it did before. In real estate, e-commerce, whatever.. there is, regardless of the age, always going to be snakeoil sales men and Tupperware salesman, or now the modern e-course motivational salesman like Wes Watson or Andrew Tate.

Ultimately, the economy and the ways people create value have changed dramatically over the decades. While the fundamentals of hard work, integrity, and consistency remain timeless, the tools, platforms, and strategies required to succeed today are very different from what many may have learned in previous decades. 

Understanding and adapting to these shifts is key—not just to survive, but to thrive. There is an easier access to information, so gatekeeping isn't working anymore. think of apps like Zillow or  "Listing spark" that are replacing real estate agents. There is AI now which can create campaigns, content, websites, CRM's so getting a product to market is a lot faster, easier and cheaper than it ever has been before.  Social Media has allowed for faster and easier networking capabilities.  Information technologies, AI, social media, these are an extra layer added on top of timeless skills like honor, dependability, integrity and entrepreneurship prowess. 

You can choose to be like the dodo or the crocodile. I wish you the best.

 I have a guy from goose head in my contacts, whenever I need insurance I call him up, give him a few details, and he will fetch a couple different policies for me to review

hehe spicy BP drama, I love it. Nothing worse than a lying thief, especially one that tarnishes the image of the industry by taking advantage of people. Everyone suffers. But if you lost money from a thief, well, roads connect to all owned real estate, commercial.. residential.. primary ..

I'd recommend holding each property in its own LLC rather than in your personal name. This provides both tax advantages and liability protection. If a tenant gets injured or a property experiences damage (like a fire), owning assets personally could expose your other assets such as your home, vehicles, or cash in the bank to potential claims. Even when personally guaranteeing on recourse loans, it's still best practice to use individual LLCs for each property.

find a good agent running or working at a well oiled brokerage and negotiate a low %. Not every agent is out to get you and run up commission.. 

you know state farm is like evil right? check out what they did to home owners in the cali fires..

I use goose head 

I highly recommend score. Also unless I've got something wrong bigger pockets is not the forum for business acquisition talk so might be better to find a better place to post this