Why they call it “Investor-Specific Financing”

• DSCR is the official name, but the framing matters.
• Conventional loans are still great (30-year fixed, strong rates) but:
• More hoops
• More documentation
• More friction
• Harder for business owners / complex income situations

What a DSCR loan is (and how it works)

• Debt Service Coverage Ratio underwriting focuses on the property’s ability to cover its own debt.
• Core concept:
• If rent covers (or nearly covers) the payment, it can qualify.
• Kevin gives a simple example:
• Rent $2,000 vs payment $1,800 → qualifies
• Even near 1:1 can qualify depending on lender guidelines.

Why this is a big win for business owners (and “interesting financials”)

• Many clients have complicated tax returns and multiple income streams.
• Conventional underwriting can feel burdensome—even demeaning—because of how intensely it scrutinizes personal finances.
• DSCR simplifies the borrower experience because it’s not about W-2 income and DTI.

LLC ownership + personal guarantee (the “clean structure” part)

• A major feature: buy in the name of an LLC (no post-close quitclaim dance).
• Still typically personally guaranteed.
• Kevin’s line worth clipping:
• “You’re the personal guarantor, but a personal guarantee doesn’t mean personal liability is unlimited.”

Avoiding the conventional 10-loan limit

• Conventional financing has the well-known 10-financed-property ceiling (often managed by splitting between spouses).
• DSCR loans:
• Don’t take one of those “10 slots”
• Can allow investors to scale further (20–30 properties possible, with increasing qualification standards as portfolios grow)

Rates, fees, and prepayment penalties (January 2026 reality)

• Historically DSCR carried higher rates/fees.
• But in the current market (January 2026), they note:
• DSCR rates can be similar to conventional
• Common caveat:
• DSCR loans often have a prepayment penalty
• Not a big deal for long-term holders (they’re not planning to exit in 2 years).

Will it show up on personal credit?

• Steve explains:
• With some lenders, yes; with others, no.
• Strategic Lending knows how to route borrowers based on that preference.
• On default and credit impact:
• Steve’s understanding: typically it would not report like a standard personal mortgage—because the loan is made to the LLC secured by the property—though consequences still exist.

What you need to qualify (simple but not “wild west”)

• Kevin emphasizes: this is not 2006-style “stated income” chaos.
• Typical DSCR pre-approval items discussed:
• Credit application + credit pull
• Proof of assets / bank statements
• Existing mortgage statements for financed properties
• Reserves: at least 6 months PITI beyond purchase/closing funds

The “new era” Moneyball stance: more conservative by design

• Their direction going forward:
• Push toward 30% down DSCR strategy more often
• Aim for a better ownership experience (less outside cash needed for property “messiness”)
• Key philosophical point:
• This isn’t about maximizing leverage; it’s about maximizing staying power.
• Closing CTA
• Kevin invites listeners to reach out with questions and book a call:
• dfy-realestate.com (Book Call button)
• kevin@dfy-realestate.com

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• Why Episode 138 marks the return to live podcast conversations in 2026
• Revisiting Micro-Wins to Millions with fresh investor perspective
• Redfin’s “Great Housing Reset” and what it really means (no hype)
• Mortgage rates dipping into the low 6% range—and why psychology matters more than math
• The hidden cost of sitting on the sidelines during high-rate years
• DFY transaction volume from 2022–2025 and what the slowdown signals
• How investor action during uncertainty led to appreciation, cash flow, and refi opportunities
• Why affordability is improving without a major price drop
• Pent-up housing demand and the herd mentality effect
• Why rents declined—and why they’re poised to rise again
• Political pressure around affordability and why it benefits long-term owners
• The pendulum theory: fear, greed, and slow-moving real estate cycles
• Why early 2026 may be one of the best entry points before momentum builds
• How to access Micro-Wins to Millions (audio, digital, and video book)
• Where to find DFY’s 12 years of transparent transaction reports
• Why now is the time to review your game plan—not wait for headlines

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Core theme: The power of one choice can reverberate through generations.

1) Making Ripples

• 4 a.m., early flight, tired and irritable.
• Kevin judges a woman based on her appearance.
• She quietly pays for his items anyway.
• Lesson: small kindness can create massive impact.
• The ripple effect multiplies every time the story is shared.

2) Who are your heroes?

• We default to celebrities… but they rarely change our personal lives.
• Real heroes are often people close to us:
• parents, mentors, teachers, neighbors, friends
• Eight-year-old girl calls her dad her hero:
• he picked her up, cleaned her scraped knee, cared for her
• Big idea: heroism is usually ordinary faithfulness.

3) Principle-based Capitalism

• A defense of capitalism rooted in:
• honesty, integrity, hard work, frugality, giving back
• Critique: “profit first no matter what” is a distortion of true capitalism.
• DFY grew faster when the focus shifted:
• from tracking numbers → to tracking people’s progress
• from transactions → to leaving people better off
• Principle-driven companies outlast founders; profit-only organizations crumble.

4) The Power of One Property

• One rental purchase impacts many:
• mortgage team, agents, title, property manager, tenant, seller, you
• And you can benefit most over time through:
• cash flow, appreciation, tax benefits, principal paydown
• Compounding concept:
• one can lead to two, two can lead to four, etc.

5) Proof Through Repetition

• Eric buys first property: January 2012
• Adds multiple properties that same year
• By 2019: nine properties
• Outcome: retired, traveling, living life on his terms while DFY handled the heavy lifting

6) Micro-Win Challenge to End The Book

• Don’t overcomplicate the first step:
• 10-minute workout
• 5 minutes with your kids
• write one sentence
• drink one extra glass of water
• say a 30-second prayer
• gather loose change and deposit it
• Final reminder: you are one decision away.

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Learn more about DFY’s done-for-you investing approach at dfy-realestate.com

Key Topics Covered:

• Why chasing money alone often leads to dissatisfaction
• Redefining success as economic independence, not net worth
• The Hawaiian Hobbit story and intentional living
• Micro-wins as the foundation of fulfillment and growth
• Why destinations without new horizons lead to regression
• The velocity of money explained through real estate
• Why traditional investments don’t multiply purchasing power
• How leverage, refinancing, and 1031 exchanges accelerate progress
• Income replacement vs. “being a millionaire”
• Portfolio refresh cycles (5–10 years) and avoiding stagnation
• Letting numbers—not emotion—drive buy, hold, and sell decisions
• Wise stewardship, tax advantages, and long-term planning
• Real estate as a vehicle for freedom, not just wealth

Memorable Takeaways:

• Success is a lifestyle that breeds fulfillment—not a checklist
• Growth is who we are; stagnation is the real enemy
• You don’t need a million dollars to live a rich life
• Freedom is the real dream behind most financial goals

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The perfect time to act—especially in real estate—is not someday, not when things feel safer, and not when the headlines calm down. The perfect time is now.

• The Power of the Present Moment
  • You can’t change the past.
  • You can’t control the future.
  • The only leverage point you have is today.
• A Life-Changing Wake-Up Call
  • A tragic, personal story that reshaped the meaning of urgency, presence, and purpose.
  • A reminder that time is not promised—and delaying what matters most comes at a real cost.
• The Three Degrees of Action
  • Inaction – Choosing comfort, avoidance, or procrastination (often rooted in fear).
  • Active Action – Lots of movement, preparation, and effort… but no meaningful results.
  • Productive Action – Focused, uncomfortable, results-driven behavior that actually creates change.
• Why Active Action Can Be More Dangerous Than Inaction
  • It creates the illusion of progress.
  • When results don’t show up, people conclude: “Action doesn’t work.”
• The “Do It Now” Philosophy
  • Inspired by W. Clement Stone, who built a billion-dollar empire one micro-win at a time.
  • Small, immediate actions compound into massive results.
• The Real Estate Application
  • The best time to buy real estate was 20 years ago.
  • The second-best time is always today.
  • Market cycles change—principles don’t.
• Market Myths, Fear, and Noise
  • Why advice from people with “teeny tiny pockets” should be filtered carefully.
  • Media fear vs. investor fundamentals.
  • The danger of waiting for perfect conditions.
• Moneyball Proof Across Every Market
  • 2008 crash
  • Post-recession recovery
  • COVID uncertainty
  • Post-pandemic normalization
  • In every cycle, principled investors who acted won.

If you’re waiting to feel ready, comfortable, or certain—you’ll be waiting forever. Progress begins when preparation turns into productive action.

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Takeaways

• Let experts do expert-level work for you.
• Investing in real estate makes you a business owner.
• Cost effectiveness should be viewed as strategic utilization.
• A successful business operates on the combined efforts of specialists.
• You can focus on what you do best.
• Trusting a team to manage your portfolio demands trust.
• Self-management often leads to higher costs in the long run.
• Property managers balance compassion and business interests.
• Managing your real estate investments is a full-time job.
• Every time you allow an expert to perform expert work, it's a micro win.

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• Kevin opens with a story about a magician using a penny, a toilet paper cannon, and a leaf blower to create an “impossible” trick.
• How the trick actually worked: palming the coin, using the toilet seat and TP storm as cover, and revealing the penny with initials “magically” on his tongue.
• Parallel to real estate: what looks like magic from the outside is actually hours of practice, failed attempts, and a precise formula executed consistently.
• Steve connects the idea to spiritual habits: showing up at church, praying, and keeping commitments—over half of success is simply showing up and honoring your commitments.
• How Kevin and Steve reverse-engineered their own wins and failures into the Moneyball Real Estate system and principles.
• Why single-family rentals (SFRs) are surprisingly liquid when bought in the right markets, at the right prices, with the right structure.
• Ways to access liquidity from SFRs:
  • Selling into a large buyer pool
  • Refinancing
  • Using a HELOC
  • Cash flow over time
• Introduction of the “magic number”:
  • Input = total out-of-pocket investment
  • Output = total profit on sale after 10 years (the magic number)
  • Then converting that magic number into average annual ROI.
• Key expense-side numbers in the Moneyball analysis:
  • Purchase price
  • Loan amount
  • Monthly PITI (principal, interest, taxes, insurance)
  • Property management fees
  • Vacancies and repairs
• Key income-side and growth numbers:
  • Estimated monthly rent (data-driven from in-market managers)
  • Rent growth assumptions (around ~3% annually)
  • Multiple appreciation assumptions (3.5%, 5%, and “what if it’s higher?”)
• The Average Monthly Increase (AMI) as a favorite metric: turning a 10-year profit into a monthly “magic” benefit.
• Breaking down:
  • Monthly cash flow
  • Monthly principal reduction (tenants paying down your loan)
  • Monthly depreciation/tax savings
  • Combined into Monthly Combined Cash Increase.
• Why cap rate is included but not central to Moneyball-style decision making.
• The difference between:
  • Cash-on-cash return (just cash flow)
  • Combined cash-on-cash return (cash flow + principal paydown + tax savings).
• General rule-of-thumb targets for a purchase-worthy Moneyball property:
  • Combined cash-on-cash return in the high single digits
  • AMI over $700/month
  • Annualized total return over 13%
  • Total profit on sale over $100,000 after 10 years.
• Understanding P&L vs real performance:
  • Why properties can show a loss on paper but still produce strong positive cash flow.
  • The role of depreciation and amortized costs in creating tax losses.
• How DFY uses a hybrid statement to reconcile real cash flow with tax benefits.
• Emphasis on predictable, consistent, ethical investing:
  • Buying conservatively priced SFRs
  • Focusing on win–win deals for sellers, tenants, managers, and investors
  • Using 1031 exchanges and refinances to grow instead of cashing out and killing the goose.
• Closing idea: There’s no cheat code or secret shortcut—just a clear formula anyone can follow if they’re willing to be patient, disciplined, and ethical.

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In this episode:

Steve shares the unbelievable story of his wife’s sudden heart attack during a mountain bike ride—and the surprising perspective of a young boy who noticed only the “awesome bike.”

Why perspective is a light switch you control, especially when the path toward your financial goals feels dark or overwhelming.

The conference room analogy that reframes how to approach your financial journey—with or without guidance.

How perspective directly influences market selection in real estate.

Why focusing on the right property matters more than falling in love with a geography.

A guided walk-through of the four major categories in DFY’s investment score:

Economics

Demographics

Geography

Investor Friendliness

Why fulfillment—not hustle, not comparison—is the real heartbeat of the Micro-Wins mindset.

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Learn more about DFY’s done-for-you investing approach at dfy-realestate.com