Fresh & Fit - How To Buy Your 1st Rental Property w- Bigger Pockets Step By Step (Novice to Advanced)

00:04:23.000 And we are live.

00:04:25.000 What's up, guys?

00:04:25.000 Welcome to Fresh Air Podcast, man.

00:04:26.000 We're here with David Green from BiggerPockets.

00:04:28.000 We're going to talk about how to get into real estate step-by-step from zero to 100.

00:04:33.000 Let's get into it, guys.

00:04:34.000 Let's go!

00:05:23.000 We are back.

00:05:24.000 And we are back.

00:05:24.000 What's up, guys?

00:05:25.000 Welcome to the Freshly Podcast, man.

00:05:26.000 It is a special day.

00:05:27.000 It's Money Monday.

00:05:28.000 We are here with a good friend, David Green, over at BiggerPockets.

00:05:31.000 We brought in the big guns for this one, guys.

00:05:33.000 Quick announcement before we get into the show, though.

00:05:34.000 Two or three main things.

00:05:36.000 Rumble.com slash Freshly Fit.

00:05:37.000 As you guys know, that is home base for free speech.

00:05:39.000 If anything ever happens to us and we get canceled, y'all know exactly where to find us.

00:05:42.000 But I will say this.

00:05:43.000 We are out of YouTube jail slash death row because we're definitely on YouTube death row for a bit, man.

00:05:49.000 So...

00:05:50.000 If you guys notice on the channel, if you go to any of our old videos or anything we've recorded before, if you look at the, you know, progression bar, the timestamps are there now.

00:05:59.000 So we are pretty much, you know, good in that respect.

00:06:02.000 So we'll see what ends up happening later on.

00:06:05.000 But yeah, man.

00:06:06.000 So if you guys want to go back, watch those videos, you can actually see the timestamps in there now.

00:06:10.000 And even in this video, it'll be there.

00:06:13.000 Also, CastleClub.tv, as you guys know, all the behind-the-scenes content is there.

00:06:17.000 Vlogs, IRL streams, etc.

00:06:19.000 A bunch of stuff over there, man.

00:06:20.000 Our old Patreon videos where we give Dating 101 advice, that's still relevant to this day, by the way, is all there.

00:06:26.000 And then, yeah, go ahead and get my book, Why Women Deserve Less. 1.00

00:06:28.000 And then Fresh's CEO Network as well.

00:06:30.000 Yes, we've got to meet up on the 20th of October.

00:06:32.000 Tap in.

00:06:33.000 But, man, screw all that.

00:06:34.000 We've got a special guest in the house, man.

00:06:39.000 Dave, we know who you are, man, but the audience might not know who you are.

00:06:42.000 Can you please introduce yourself to the people?

00:06:44.000 Yeah, I'm a former law enforcement officer, did that for about 10 years, started buying some real estate.

00:06:49.000 The world of law enforcement changed quite a bit during that time.

00:06:53.000 I was very lucky enough to get out.

00:06:54.000 I kept buying rental properties, eventually started a real estate team, started a mortgage company, and now I host the BiggerPox podcast, biggest real estate podcast in the world, and I teach people how to be good with money and invest in real estate.

00:07:08.000 Bam, bam.

00:07:09.000 Very similar story to myself.

00:07:11.000 You did Patrol, right?

00:07:13.000 Yeah, I started in jails as deputy sheriff, worked a little bit of marine patrol, and then I moved out and worked with the transit police doing patrol.

00:07:19.000 Okay, and this is out in California?

00:07:21.000 Northern California.

00:07:22.000 Yeah, how was that, man?

00:07:24.000 I mean, it's not a fun place to be a cop in the Bay Area.

00:07:26.000 You're not loved.

00:07:28.000 There's a lot of stuff to get into, of course.

00:07:30.000 You learn a lot very quickly in that area, but I'm glad.

00:07:34.000 Let's just say I'm glad that I don't have to be there, and my heart goes out to all the first responders who are still doing that job.

00:07:38.000 It's thankless.

00:07:39.000 Yeah, it really is, especially nowadays with the, you know, anti-police culture that we got going on.

00:07:44.000 We had Paul Alex on the show last Monday, actually.

00:07:46.000 He was a cop, I think, out of, like, the Oakland area, out of the Bay Area.

00:07:50.000 Yeah, the same area that I was working in.

00:07:50.000 So, yeah.

00:07:53.000 You weren't Bart, right?

00:07:54.000 I was Bart.

00:07:54.000 Oh, yeah, it was Bart.

00:07:55.000 That's what it was, yeah.

00:07:56.000 And that's the transit police for the train, if I'm not mistaken.

00:07:59.000 That's exactly right.

00:08:00.000 Yeah, but there's probably 45 stations throughout the Bay Area.

00:08:02.000 So, if you just think about the kind of people that are taking public transit all the time.

00:08:05.000 Oh, yeah.

00:08:06.000 Yeah, they need police, bro.

00:08:07.000 You're not living in Leave It to Beaverville.

00:08:09.000 Yeah, and you guys are probably busy as hell for transit police.

00:08:12.000 Yeah, all the time.

00:08:13.000 That's wild, bro.

00:08:14.000 Because normally, you know, that's a chill gig.

00:08:16.000 Like, if you look at, like, Amtrak police, they're chilling most of the time.

00:08:18.000 But, like, Bart?

00:08:19.000 Nah, man.

00:08:20.000 That's a...

00:08:21.000 Y'all are busy as hell.

00:08:22.000 What made you want to actually get into real estate versus staying the cop route, getting a pension, all that stuff?

00:08:26.000 I mean, I probably would have stayed the cop route if I could have.

00:08:28.000 I developed some plantar fasciitis that was terrible for just, frankly, working too much.

00:08:32.000 I was working like seven days a week to be able to invest into real estate.

00:08:36.000 And I was referring all of my friends to real estate agents to help them buy real estate.

00:08:40.000 And then they would come back and ask me, what do I do?

00:08:42.000 How am I supposed to handle this?

00:08:43.000 This is what the inspection said.

00:08:44.000 Everybody hates their agents.

00:08:45.000 It's very hard to find a good real estate agent.

00:08:47.000 The bar is way too low.

00:08:48.000 So I got my license and started selling real estate as a cop and in my first year I ended up being like one of the top agents in the whole brokerage and I was doing it like with 25% of my time maybe.

00:08:58.000 So when I got to the point that my feet were so bad I couldn't work as a cop anymore it was a natural move to go and start selling real estate as an agent.

00:09:06.000 I was good at that, but I did not love having the amount of conversations that you have to have when you're a real estate agent.

00:09:11.000 You're on the phone all the time.

00:09:13.000 You're dealing with a lot of people's emotions.

00:09:15.000 It's just not really my personality to do that.

00:09:17.000 I'm more about the facts.

00:09:19.000 As an investor, I did really well, but I wasn't a great agent.

00:09:21.000 So I ended up hiring people on my team who loved talking to people but did not have the knowledge and the expertise I had so I could coach them with what to say to the clients.

00:09:29.000 That led to the David Green team.

00:09:31.000 Last year, we sold $200 million in real estate.

00:09:33.000 So we have Southern California...

00:09:35.000 Northern California, then I opened a loan company.

00:09:37.000 That's the one brokerage.

00:09:38.000 We're one of the biggest lenders in the country right now, so we can do loans all throughout the country.

00:09:42.000 And it just makes sense as you continue to grow businesses and save money and learn things about life, especially in the world of real estate, that you'd have more information to share with other people.

00:09:52.000 There's a lot of people right now, if we're being frank, that can give you information about real estate investing.

00:09:57.000 I mean, YouTube's full of it.

00:09:58.000 TikTok's everywhere.

00:09:59.000 It's hard to know who you can trust.

00:10:00.000 There's not as many people that you can trust that can give you information about business, personal budgeting, and investing in real estate, especially with the economy you're going into.

00:10:08.000 Be very careful where you're getting your information from.

00:10:10.000 Yeah, no, absolutely, man.

00:10:12.000 And a lot of people will sit there and try to tell you, oh yeah, this is how to real estate invest or whatever, or they'll try to give you some advice and they don't even have any property.

00:10:19.000 And it's like, what the hell?

00:10:21.000 And I'll tell you this, I've been fortunate enough, I've got 16 houses now, and I've been able to really learn a lot during the process of each closing.

00:10:32.000 Yeah, a lot of the things that I learned, you would not learn unless you had actually been in a deal, be under contract, deal with the BS that comes with the real estate market because it can absolutely be trying.

00:10:43.000 I know some of you guys might be wondering like, well, Myra, Myra, what are you talking about?

00:10:46.000 Guys, like during the day, a lot of If I'm not sleeping right at the gym, I'm on the phone with my real estate agent and we're going over deals.

00:10:51.000 We're going over figuring out if this works out, if this doesn't, cash on cash returns, etc.

00:10:55.000 Which we're actually going to talk about here.

00:10:57.000 But my point with this episode, guys, you guys have asked a lot about real estate.

00:11:00.000 And Dave was in town, so I said, you know what, man?

00:11:03.000 Let's go ahead and knock this out and get you guys pretty much a video that you can go to at any time that you can refer back to when it comes to real estate.

00:11:10.000 But real quick before we get into it, Dave, you just dropped the book, didn't you?

00:11:13.000 Yeah, this is the hardest book I ever had to write, my sixth one, but it's the one I'm most proud of.

00:11:17.000 It's called Pillars of Wealth, How to Make, Save, and Invest Your Money to Achieve Financial Freedom.

00:11:21.000 That's here on the screen.

00:11:22.000 Yes, there you go.

00:11:23.000 And basically, this is a book to combat all the garbage that you're going to see on TikTok and Instagram and YouTube about people that are pretending to educate you on real estate to get you into their course, and you may or may not learn anything useful.

00:11:34.000 So it's not hard to sell people on why they should invest in real estate.

00:11:37.000 That's why most people are listening to this right now.

00:11:38.000 They all want to do it.

00:11:40.000 It's very difficult to build a strategy that will sustain you for the long term.

00:11:43.000 The people that I've found that actually are good real estate investors that make it for the long term, which is really how you make your money in real estate.

00:11:48.000 You hold on to it for a very long period of time.

00:11:51.000 They're people that focus on more than just acquiring it.

00:11:53.000 They are good at saving their money, which is playing defense, and they are good at making money, which is playing offense.

00:11:58.000 My advice that I've been giving to people for a long time is you need to be good at these three things.

00:12:02.000 If you can't save your money and you can't budget, it doesn't matter how much money you make, you're not going to have anything to invest.

00:12:07.000 And there's some people that are great at saving money.

00:12:09.000 They make their own soap.

00:12:10.000 They stitch their own clothes.

00:12:11.000 They've been driving the same Toyota Tercel for 45 years and trying to keep it going.

00:12:15.000 But they don't make enough money to ever get ahead and invest in real estate.

00:12:18.000 You need to focus on all three of these.

00:12:20.000 So the book basically spells out for each of these three pillars specific strategies that you can incorporate to get better at budgeting your money, better at keeping what you've made, and better at making more money and then investing the difference.

00:12:32.000 People need that for sure.

00:12:33.000 Yeah, people absolutely need that.

00:12:34.000 What I'm going to do, guys, I'm going to read the chats, and then from this point forward, we're only going to read 20 and up because I want to make sure we got 10 things that we got to go over here.

00:12:41.000 This is going to be the most robust step-by-step guide to get into real estate.

00:12:45.000 So let's go ahead and hit these things real fast.

00:12:47.000 Bill's where we at.

00:12:49.000 This will be an end-all, be-all for real estate.

00:12:50.000 Yeah.

00:12:51.000 Hey, Martin, I make 50K a year, 750 credit score, 13K saved.

00:12:54.000 I'm interested in both Bitcoin ATM, ATM together, and real estate.

00:12:57.000 Would you just suggest I keep solving...

00:12:59.000 Keep saving?

00:13:00.000 Keep saving.

00:13:01.000 Would you suggest I keep saving until I can afford to buy my first property or generate an additional income with BTM? Thanks.

00:13:08.000 Save and get your first property, bro.

00:13:10.000 And then house hack it with an FHA loan if you can.

00:13:12.000 But again, it depends on your financial situation, which we're going to go over right now in these 10 steps.

00:13:16.000 You better pay attention because you're going to have to have some things in place, guys, besides just having the money.

00:13:23.000 Yeah, that's tough.

00:13:30.000 Is my only option to buy out of state or wait for the market to cool?

00:13:34.000 Those are two options.

00:13:35.000 I would say look elsewhere that you can potentially put someone to take care of your property if you can.

00:13:39.000 If you've got to invest out of state, that's fine.

00:13:41.000 That's what I do.

00:13:42.000 I invest heavily in Connecticut because I have an infrastructure there, but wherever you decide to invest, I would say have someone there that can help you.

00:13:50.000 What would you say, David, to that real quick?

00:13:53.000 The $50,000 a year, what he should do?

00:13:55.000 Yeah, out of state, or should he...

00:13:58.000 I prefer buying a primary residence first because you can put much less money down, which means you have more money to keep in reserves, or put into making the property worth more.

00:14:06.000 I think it's a bit of a fallacy that people think that putting more money down on a property is automatically safer.

00:14:12.000 Because you do get more equity, but that only matters if you're going to sell the property.

00:14:15.000 It doesn't make as big of a difference in the payments as you think.

00:14:18.000 I'd rather see someone put a quarter of the money down, 5% instead of 20%, keep the extra 15% set aside for tough times for reserves, and maybe improve the property.

00:14:27.000 There's things that I talk about where you can add units to a property so that it will cash flow more, turn something into an ADU, an accessory dwelling unit.

00:14:35.000 That will generate more rent.

00:14:37.000 And also when you're buying a primary residence and then you house hack, which is a strategy where you rent out rooms in your house or rent out parts of the house, not only did you buy real estate, but you also are saving money every month that you would have been wasting in rent.

00:14:48.000 Exactly.

00:14:48.000 The goal is to get out of that as fast as you can.

00:14:50.000 So house hacking really hits the investment pillar and it hits the defense pillar at the same time.

00:14:54.000 So you can save more money and you're acquiring real estate with less money.

00:14:56.000 That's why we're so big with telling our audience for their first property, even if you got the equity, you should probably FHA it just so that you can keep more capital.

00:15:04.000 And multifamily if you can.

00:15:06.000 Exactly, so that you can offset your costs.

00:15:08.000 And then you're able to save money during that year that you're in there.

00:15:11.000 We're actually now able to do multifamily loans at 5% down.

00:15:14.000 Even if you already have an FHA loan, you can't get another one.

00:15:16.000 Now you can put 5% down to get a conventional loan on a 2, 3, or 4 unit property.

00:15:20.000 Oh, wow.

00:15:20.000 Okay.

00:15:21.000 Then definitely we'll talk about that as well with your lending coverage.

00:15:24.000 Because that might be helpful for some of the people watching.

00:15:29.000 Save more money, my friend.

00:15:43.000 You're going to need to save a considerable amount of money before you buy.

00:15:47.000 We're good to go.

00:15:48.000 We're good to go.

00:16:10.000 And then Wyron goes, continue the good work, Myron.

00:16:15.000 Don't address the copycats anymore.

00:16:16.000 They need validation.

00:16:17.000 The only way they can attack you is through your weakest link, Walter.

00:16:20.000 Ignore them.

00:16:20.000 You are great.

00:16:21.000 Let Walter scrap for himself.

00:16:22.000 Not built for on-screen work.

00:16:25.000 Okay, man.

00:16:25.000 You guys can say whatever you guys want to say, but yes.

00:16:27.000 I mean, it is what it is.

00:16:28.000 It's amazing how people ask us for our take.

00:16:29.000 We give our take, and then they get mad and lose their minds.

00:16:32.000 This guy, Mo, is a change chugger, a coin machine, a pucker-lit penny licker.

00:16:36.000 I bet he also eats strawberry jam with...

00:16:39.000 Right out the jar with a spoon.

00:16:41.000 All of FNF. All of FNF. All the congrats on the pounds, Mo.

00:16:45.000 Good stuff, man.

00:16:46.000 That was the most backhanded compliment I've seen in a while.

00:16:48.000 For real.

00:16:48.000 Can we get some bare minimum numbers needed to own a first property?

00:16:51.000 Minimum monthly income, minimum credit, debit to earnings ratio, down payments, reserves for buying anywhere in real estate.

00:16:56.000 Stay tuned, man.

00:16:59.000 That's going to come right now after I finish reading these.

00:17:02.000 Okay, Kobe goes, Moe is a petty muncher.

00:17:04.000 Fair.

00:17:06.000 Zerka is FBI agent.

00:17:07.000 Let's get Zerka on the FNF After Hours show permanently. 1.00

00:17:10.000 El Abba and his pet pig that I caught digging in my trash.

00:17:13.000 FNF on top.

00:17:14.000 Let's go.

00:17:14.000 See, a bunch of y'all love Zerka.

00:17:16.000 W Blitz, W Henny Hustler, W Penny Munch, W Myron Bixby, W For Real Fresh.

00:17:20.000 No, he means For Fresh.

00:17:22.000 Okay.

00:17:23.000 Are there any specific cities and states you do not recommend owning a house or having a rental in?

00:17:27.000 California is obviously to be avoided.

00:17:29.000 Let's say a place is not so obvious that you never think about.

00:17:31.000 One that comes to mind that is not good is Detroit.

00:17:34.000 Michigan in general is not a good place to invest, even though you could get houses for good prices, but the tenant laws are definitely in the tenant's favor.

00:17:45.000 Do you have any?

00:17:46.000 Any places I wouldn't invest in?

00:17:48.000 It's not as cut and dry as that makes it sound.

00:17:50.000 So the issues of is it landlord friendly, tenant friendly really only come into place if you've already made a lot of mistakes and you're having an eviction.

00:17:57.000 So what I find is the better of the area that you...

00:18:00.000 This is a thing that goes back to law enforcement too.

00:18:02.000 What I found is I don't think I ever took one person to jail that had something to lose.

00:18:07.000 Yeah.

00:18:08.000 That you show up, there's a problem, turn the music down, don't do whatever you're doing.

00:18:12.000 People that have something to lose, they gotta be at work the next day?

00:18:14.000 Yes, sir.

00:18:15.000 People who have nothing to lose are more likely to be defiant.

00:18:20.000 So when you're buying in really good areas where you're getting better tenants that care about their credit score, that would be embarrassed about getting evicted, it never actually makes its way into the courts because they are not gonna make you evict them.

00:18:29.000 If they can't pay their rent, they just leave.

00:18:31.000 So if you're in a state with worse laws that favor landlords, just buy in better areas.

00:18:38.000 You can sort of mitigate how likely you are to actually end up in court.

00:18:42.000 Another thing too is basically the magic number is about $60,000 per year or above is the threshold where you significantly reduce your chances of having to evict somebody.

00:18:53.000 Makes sense.

00:18:54.000 Are there any specific cities?

00:18:55.000 Nope, we got that one.

00:18:56.000 Let's go.

00:18:57.000 Big Boston CEO Network meet up this weekend.

00:18:58.000 Cool.

00:18:59.000 Very slayer.

00:19:00.000 Shout out to you.

00:19:01.000 Myron, I bought my first investor property and it was all because of you.

00:19:03.000 I never thought I'd make it this far.

00:19:05.000 So thank you.

00:19:05.000 You guys should make a video on how to vend someone from your property.

00:19:08.000 We will talk about that here in a second.

00:19:09.000 But that's one way.

00:19:10.000 $60,000 a year or more.

00:19:12.000 BiggerPox and FNF changed my life.

00:19:13.000 W has hacking method.

00:19:14.000 Absolutely, bro.

00:19:15.000 Caught up, Bill?

00:19:16.000 Yep.

00:19:16.000 All right, man.

00:19:17.000 So guys, we are going to go into the 10 steps that you need to get into real estate investing, man, step by step.

00:19:24.000 So the first one I wrote a list here out is step zero.

00:19:28.000 That's how important this is, by the way, guys.

00:19:30.000 It is...

00:19:32.000 Improve your credit and save for the down payment.

00:19:38.000 And the reason why I say this is step zero, guys, is if you don't have the foundation laid where you don't have good credit, well, it's going to significantly impact your ability to get good deals.

00:19:46.000 It's going to significantly impact your ability to cash flow when you do get a loan. 0.89

00:19:50.000 Quite frankly, it's going to make your whole process very miserable if your credit score sucks.

00:19:56.000 You want to show some type of financial responsibility off the rip and get your credit score up.

00:20:02.000 That means using your credit card and paying it off.

00:20:04.000 Trying to stay below That 30% of your max credit cards.

00:20:09.000 I know someone here asked, hey, should I open up another credit line?

00:20:11.000 If it's going to increase your total amount of available credit, do it.

00:20:15.000 Because let's say you have one credit card that's only $1,000, right?

00:20:17.000 And you spend $500.

00:20:19.000 Well, now you've effectively used 50% of your credit limit, and that knocks your credit score down.

00:20:23.000 However, if you open up another credit line for $1,000 and you spend that $500, now you've only spent 25% of your overall credit line.

00:20:29.000 So having more credit cards open does help with giving you...

00:20:33.000 A higher limit, which then decreases the percentage that you actually have used.

00:20:37.000 So that's helpful.

00:20:38.000 But work on getting your credit score, guys, up to at least, I would say, to buy houses somewhere between a 720 to 740.

00:20:44.000 You know, is going to put you in a good position.

00:20:46.000 I would say with the competitive market nowadays, a 740.

00:20:49.000 Because that way, that's going to impact your ability to get a house at a decent credit interest rate.

00:20:53.000 Guys, I just closed on a house on Friday.

00:20:55.000 You guys know what the interest rate is?

00:20:56.000 8.8 right now, man.

00:20:57.000 Sheesh. 0.99

00:20:58.000 Fucking crazy, dude. 0.99

00:20:59.000 And even if you're buying residential, it's an eights, which is really high. 1.00

00:21:03.000 So you best believe if your credit score sucks, and that's me with a credit score damn near almost 800.

00:21:08.000 So if you have a credit score that sucks, you're going to be getting 9%, 10%, and then it's going to completely destroy your ability to cash flow, which is already limited thanks to the market. 0.58

00:21:16.000 But what's your guys' takes?

00:21:18.000 I think people forget how much credit is important, and I think for most people, I like it to like school.

00:21:23.000 So let's say you want to go to a good school like Yale, or for example, Harvard.

00:21:27.000 You want to have a good study of the work that you're going to have to do to pass your exams to get into that school, and people study their whole life for that.

00:21:35.000 Same thing with credit.

00:21:36.000 You want to build your foundation the correct way to get into the school of life, which means, for example, your credit score from day one.

00:21:42.000 All right, I'm 18 years old.

00:21:43.000 How do I start?

00:21:44.000 Yep.

00:21:45.000 Your father, your mother, your auntie, your uncle.

00:21:47.000 Hey, Auntie Susie, Auntie Albert.

00:21:50.000 Sorry, Uncle Albert.

00:21:52.000 I want to get into...

00:21:53.000 I want to get a credit score.

00:21:55.000 Do you mind if I hop onto your credit card and become like a partner?

00:21:58.000 You know, like an additional...

00:22:00.000 Become an authorized user is the hack, guys.

00:22:03.000 Under someone that already has established credit line.

00:22:05.000 We're good to go.

00:22:22.000 And there's books you can read to as well, like your credit score by Liz Weston.

00:22:26.000 So just look into that, make sure that's a priority so you can actually manage to get a better credit score for yourself.

00:22:30.000 Yeah.

00:22:31.000 Credits comes in tiers.

00:22:32.000 So you do have to have a minimum credit score for different loan products, but as your credit goes up, you just get better rates, but they're not wildly different.

00:22:40.000 It's not like 2% jumps.

00:22:41.000 So it's usually going to be somewhere like for you getting 8.8, someone with bad credit might have been offered like 9.1 or something.

00:22:47.000 It's not going to be a huge difference, but if you don't have good credit, you can't buy real estate at all.

00:22:57.000 Yeah.

00:23:08.000 You probably should address the fact that you don't have money before you go buy real estate.

00:23:12.000 As a real estate investor, you've seen it takes money to make money.

00:23:15.000 Things go wrong.

00:23:16.000 Things break.

00:23:17.000 It's not like buying a stock where Apple's not going to come and you say, we had a bad quarter.

00:23:20.000 You need to give us some more money.

00:23:21.000 There's a capital call.

00:23:23.000 When you buy real estate, you're on the hook for what could go wrong.

00:23:25.000 And so you're going to need to have some cash reserves.

00:23:27.000 And I like people that look at real estate like the carrot that's going to have them put their financial house in order so that they can go buy it.

00:23:33.000 Yep.

00:23:33.000 Yeah.

00:23:34.000 And also, this is a two-part step, guys.

00:23:36.000 Not only are you improving your credit, right, to be able to even get into the game of real estate, you're also going to be saving money while you do this, okay?

00:23:44.000 This might be, this is step zero right here, this might be a one to five-year mission slash plan where you're effectively, you know...

00:23:53.000 Dave talked about it where he was a police officer and he was working seven days a week to save up that money.

00:23:57.000 Typically, getting your first property is going to be the hardest, guys.

00:24:00.000 But once you get that first property and you have that tangible asset and you control it, then things become easier and easier and easier.

00:24:06.000 Also, budgeting is important, too.

00:24:07.000 Yeah.

00:24:08.000 Because if you can't budget your money from now, how do you get a budget to manage a property?

00:24:11.000 You can't.

00:24:11.000 Yeah.

00:24:12.000 So what I would say is, because there's two different routes here with how much you need to save depending on what route you want to go.

00:24:18.000 So first, obviously, work on your credit score, guys.

00:24:19.000 Get that up. 0.99

00:24:20.000 And then...

00:24:22.000 Save up money so that you can put a down payment.

00:24:24.000 Now, you have two options when it comes to that.

00:24:25.000 You can go the FHA route, or you can go ahead the investor route and put that 20% to 25% down.

00:24:30.000 I think for a lot of people, for their first home, house hacking is probably the best option where you're putting 3% to 5% down.

00:24:35.000 And if you can, try to get a duplex or a triplex, or a fourplex, because this is a residential loan, so you can buy a property of up to four units to stay within residential.

00:24:44.000 After that is commercial, and that's a whole other game, which Dave could probably speak to that more.

00:24:50.000 But you're able, and you live in one of the units, and then you're able to collect rent from the other tenants, and then that will offset your living costs.

00:24:56.000 Right.

00:24:57.000 And Dave, you mentioned you have a program for 5% for first-time homebuyers?

00:25:00.000 Yeah, so there's several different kinds of loans, right?

00:25:03.000 You've got basically conventional loans, that's what most people are going to be getting.

00:25:06.000 You've got what we call non-conventional or non-QM loans.

00:25:09.000 And then you've got FHA and VA loans.

00:25:11.000 So VA loans are available to someone that was in the military.

00:25:14.000 You could put 0% down if you're going to be living in the house as your primary.

00:25:17.000 Most lenders, like a real estate, like you're living in it as your primary residence or you are going to be renting it to someone else and it's an investment property.

00:25:24.000 If you live in the property, you are considered lower risk.

00:25:27.000 So they will let you get away with the worst credit score, you'll get a better interest rate, and you'll put less money down.

00:25:32.000 So the idea here is you get better lending standards if you're going to be living in the house.

00:25:36.000 Now, there's nothing that says you have to live in it for the rest of your life.

00:25:39.000 You buy a four-unit property, you live in one of the units, you rent out the other three, you live for free or maybe make a little bit of money, and then in a year you move out.

00:25:47.000 You go buy another one, you put 5% down or 3.5% down if you have an FHA loan available.

00:25:51.000 Now, it cash flows more than it did because you got an extra unit to rent out, and you go repeat the next thing.

00:25:56.000 You don't have to be a huge baller that has tons of money putting it down on expensive real estate to build up this snowball if you're willing to be a little uncomfortable and move every year.

00:26:04.000 For a year, yeah.

00:26:05.000 And guys, you've got to live in it for a year.

00:26:07.000 Please don't commit mortgage fraud.

00:26:09.000 That will get you in trouble.

00:26:11.000 And the feds will come knocking at your door. 0.92

00:26:13.000 So yeah, live in it for a year, guys.

00:26:14.000 Make it happen.

00:26:15.000 Yeah, it's going to be uncomfortable.

00:26:15.000 Yeah, you might not be in the inner city or the cool area with all the hoes or whatever.

00:26:19.000 But it's going to set you up for life because what you're basically doing is you're acquiring an asset for a With very little money down that you can control and the bank is giving you damn near 95% of the money.

00:26:30.000 W, and actually speaking, guys, you're probably wondering, okay, I'm working a regular job.

00:26:34.000 How is this possible?

00:26:35.000 Get a second job or overtime on your job.

00:26:38.000 I think for most people, they think, oh, you know what?

00:26:40.000 I don't have enough money.

00:26:41.000 Understandable, but you can work an extra job or overtime on your job.

00:26:44.000 And for most people in here that want to get a property, listen, it takes time.

00:26:47.000 Maybe a year, two years, but save your money up for it.

00:26:49.000 You will get it eventually.

00:26:50.000 Now, let's answer this question.

00:26:51.000 Let's say they want to buy for easy numbers purposes.

00:26:54.000 A house that's $100,000, right?

00:26:56.000 And they're going to house hack it.

00:26:58.000 How much money should they have total to not just move in, but closing costs, reserves for anything that might break down?

00:27:05.000 What do you think they should have?

00:27:05.000 You're gonna need five grand for the down payment if you're buying as a primary residence.

00:27:09.000 You're gonna probably need another five grand in this case for closing costs.

00:27:12.000 And then I'm gonna think you probably want another ten grand on top of that.

00:27:15.000 Reserves?

00:27:15.000 Yeah, reserves.

00:27:16.000 Things that can go wrong.

00:27:17.000 So there you go guys.

00:27:19.000 So for every hundred thousand dollars pretty much, think of it this way, you're gonna need 20k.

00:27:23.000 Yeah.

00:27:24.000 Like, total.

00:27:24.000 Minimum.

00:27:25.000 Because remember, to define reserves for you guys, that's basically money that you have.

00:27:30.000 God forbid something happens where you can't work, or you have vacancy where tenants aren't around, or something happens at Mercy Fix.

00:27:36.000 Air conditioner breaks.

00:27:37.000 Yeah, you know what I mean?

00:27:38.000 Like, you have that money where you can make that repair immediately.

00:27:41.000 And Fresh was transparent about that, telling you guys, he bought a house with no reserves, it was hell.

00:27:45.000 So I spent two years working overtime at my job, struggling by the way, right?

00:27:49.000 I was making 50 bucks an hour, regular, and I had like 13K saved up, right?

00:27:55.000 Sorry, 15K saved up.

00:27:56.000 I spent 12K, everything closing, everything like that, and then another 2K for like repairs, whatever.

00:28:02.000 Long story short, I had 1K in my account savings after that.

00:28:05.000 Now mind you, I forgot that like we need my property.

00:28:07.000 Things break down.

00:28:08.000 So I'm like, okay, cool.

00:28:09.000 I got a property. 0.98

00:28:10.000 I'm killing it. 0.98

00:28:11.000 I'm 23 years old. 1.00

00:28:12.000 I'm killing this shit, right? 1.00

00:28:13.000 Then... 1.00

00:28:14.000 Lo and behold, plumbing issues, roof issues. 1.00

00:28:18.000 I'm like, fuck, bro. 0.99

00:28:19.000 It's always in year one, too, when it gets bad. 1.00

00:28:21.000 I am screwed.

00:28:22.000 Luckily, my realtor showed to him, Nick, he mentioned White Green. 0.98

00:28:26.000 There's a program you can use, government funding, where they fund your repairs, and I got into that program, and I covered it, but for the most part, without reserves, bro, you're screwed.

00:28:35.000 That's very important, man.

00:28:36.000 That's what you want.

00:28:37.000 So I think that's a really good number to go off of.

00:28:40.000 So guys, for every $100,000 that you're buying the house, have $20k.

00:28:45.000 Minimum.

00:28:46.000 And that's going to cover everything.

00:28:47.000 Closing costs, your reserves, and your down payment.

00:28:53.000 Alright, cool.

00:28:53.000 So that's step number one.

00:28:55.000 Sorry, that was step zero.

00:28:56.000 Now we're going to get into step one.

00:28:59.000 Step one, guys, is get pre-qualified and talk to a lender.

00:29:03.000 This is so important and so many people don't do this.

00:29:06.000 And this applies actually even if you want to get an apartment as well.

00:29:08.000 Not an apartment, sorry.

00:29:09.000 If you want to buy a house, whether you want to live in it, invest, whatever it may be.

00:29:12.000 Because you need to figure out, guys, how much house you can actually afford.

00:29:18.000 As a realtor, right, when you were back in the day, how annoying is it for someone to come to you and say, hey, I own a property.

00:29:25.000 Are you pre-approved?

00:29:26.000 No.

00:29:27.000 Is that really annoying?

00:29:28.000 You just don't work with them.

00:29:29.000 Yeah.

00:29:30.000 Some realtors won't even work with you if you're not pre-approved or pre-qualified.

00:29:33.000 What's the point?

00:29:33.000 Yeah.

00:29:34.000 And it's important, guys, because you need to know, the reason why getting pre-approved slash pre-qualified is so important, because you need to figure out what you can actually afford to And then look at houses in that range.

00:29:44.000 I can't tell you how many times people just will go ahead and start looking at houses.

00:29:47.000 They never got pre-approved, never got pre-qualified, don't know what they can actually afford because you think you might be able to afford something.

00:29:52.000 But then they go ahead and look at your debt-to-income ratios, etc.

00:29:55.000 You know, you want to buy that new Mercedes and you got that monthly payment.

00:29:59.000 Every month.

00:30:00.000 That's going to ding you guys, right?

00:30:02.000 So that's going to ding you where your debt to income ratio goes down regardless of how much money you make.

00:30:07.000 There's a point you mentioned earlier on a different podcast where whatever you buy within that time period could mess up your lending process.

00:30:15.000 Yes.

00:30:15.000 Okay.

00:30:16.000 So this is, okay.

00:30:17.000 And see, this is something that you don't realize until you buy a house.

00:30:20.000 Well, us realtors know about this because this is like the bomb gets dropped on your escrow.

00:30:24.000 It's when you open another line of credit before you close on the house.

00:30:26.000 Yes.

00:30:27.000 Yes.

00:30:28.000 It could be anything, by the way.

00:30:29.000 So this always pops up when someone's got the housing contract and they're excited and they go to the furniture store to furnish it.

00:30:34.000 And they don't have the money, so they open another line of credit to buy the furniture.

00:30:38.000 Or maybe you're like, I got a new house, I'm gonna have a new garage, I want a new car.

00:30:42.000 So you go to the dealership and you open another line of credit.

00:30:44.000 What happens is that counts against your debt to income ratio.

00:30:47.000 And most people buy the most expensive house they possibly can for the debt to income ratio they have.

00:30:52.000 So when you open this new line of credit or you take on additional debt, it bumps your debt to income ratio down so you no longer qualify for the loan that you had.

00:31:00.000 And at this point, your earnest money is often at risk.

00:31:02.000 You can't get your deposit back because you've waived your contingencies.

00:31:05.000 You've already spent all the money on the inspections and the stuff.

00:31:07.000 You want to look at the house.

00:31:08.000 And then three, four days before closing, you find out that the loan won't fund.

00:31:12.000 Yeah.

00:31:12.000 And that's a little bit more once you get under contract and stuff like that, which we'll definitely talk about that.

00:31:18.000 But yes, guys, once you sign a contract and you're in the process of buying the house, you don't open nothing.

00:31:25.000 I don't even want you moving money around. 0.99

00:31:27.000 Like you don't do shit. 0.93

00:31:29.000 Because the thing is, you guys gotta understand is that the banks and lenders are extremely sensitive nowadays to any financial activity because of the housing crash that went down back in like 07, 08. 0.99

00:31:40.000 So they were giving out loans like candy, the market crashed, so now they're a lot more strict.

00:31:45.000 That's why you got private mortgage insurance paying, if you don't put down 20%, you gotta pay something called PMI. All these rules and regulations come in, so if you even move money around, you open up another credit line, et cetera, That can fuck you up and they can yank their loan from you.

00:31:58.000 Imagine doing all the hard work, saving for two years, maybe a year and a half, and you can't get a profit because you made one choice.

00:32:05.000 And you lose your deposit.

00:32:06.000 There you go.

00:32:06.000 That's the big one.

00:32:07.000 You lose your deposit, guys.

00:32:08.000 It's serious, man.

00:32:09.000 And a deposit typically is you're putting down 1% of the purchase price a lot of the times.

00:32:13.000 Between 1% to 3%, right?

00:32:14.000 You could get away with 1% in a market like this.

00:32:16.000 In a hot market, usually the sellers are going to want more.

00:32:18.000 Mm-hmm.

00:32:19.000 But it's money that you lose.

00:32:20.000 You're not going to get that back.

00:32:21.000 That's why you get pre-approved.

00:32:23.000 There's a lot of rules that there's no way that we could go over every single thing.

00:32:26.000 Like during the last crash, or actually no, I think Bush put this in a place, where the lenders, if they're going to be doing loans that are sponsored by the federal government, like Fannie Mae, Freddie Mac loans, they have to source the funds.

00:32:39.000 They have to know where the money came from.

00:32:40.000 They want to make sure terrorists aren't bringing money into the country and laundering it through you buying real estate.

00:32:45.000 So when you put money in your bank account and you show proof of funds, the lender actually has to go back and say, where did that money come from?

00:32:51.000 Was this actually your money?

00:32:53.000 No one would ever think about that if they just wanted to go look at houses and then try to get pre-approved at the last minute when they want to buy it.

00:32:58.000 Yeah.

00:32:59.000 So guys, get pre-qualified.

00:33:01.000 See what you are actually able to afford, okay?

00:33:05.000 What you think you make and what you can afford are two different things because other things are going to come into play when they run your credit.

00:33:10.000 They're going to see your debts, etc.

00:33:12.000 Hell, you might have a bill that you didn't even know that you didn't pay for a hospital visit that you had five years ago that's been eating away at your credit score.

00:33:18.000 So you really need to figure out, get pre-approved, get pre-qualified, figure out what you can afford because that's going to save you a lot of headaches.

00:33:25.000 The worst thing ever is you go out looking at houses, you find a deal that you like, like, oh my God, I love this place.

00:33:29.000 And then you go ahead and you try to make an offer and go through the process and you find out, oh, you can't even afford this.

00:33:34.000 I'll never forget, bro.

00:33:35.000 Back then, I had almost like 850 credit perfect score.

00:33:40.000 And I had like stellar credit.

00:33:41.000 I was about to get a range over 0% down. 1.00

00:33:44.000 And my realtor was like, bro, if you do this shit right now, you're fucked. 1.00

00:33:47.000 Don't do it. 1.00

00:33:48.000 Wait till after.

00:33:49.000 Things settle down.

00:33:50.000 Then get it.

00:33:51.000 It's not just the credit score.

00:33:52.000 They're looking at your debt to income ratio.

00:33:53.000 You take on the debt.

00:33:54.000 And that pays up when we check your credit.

00:33:56.000 So I tell people that at the one brokerage, the loan company, when we look at your credit, it's like a doctor checking your blood.

00:34:02.000 You might not have known that you have these issues, but the quicker that you get yourself pre-approved, we can say, hey, did you know, like you said, you have this thing that hasn't been paid.

00:34:10.000 It's eating away at your credit.

00:34:11.000 Did you know if you pay off these little bills here that you forgot about, we can bump your credit score up 40 points.

00:34:16.000 We can get you into a better interest rate.

00:34:17.000 You could qualify for a more expensive house.

00:34:19.000 Maybe you go from buying a two unit to a three unit now.

00:34:22.000 That brings in an extra $1,200 a month of income just by starting getting pre-approved.

00:34:25.000 Those small little nuances can absolutely change the deal.

00:34:28.000 I got a property.

00:34:29.000 I paid off all my credit cards just because I didn't want that.

00:34:32.000 Put yourself in the best standing.

00:34:33.000 Yeah.

00:34:34.000 That's smart.

00:34:35.000 That segues perfectly into number two.

00:34:39.000 You can talk about this, Dave, in detail.

00:34:42.000 Hire a good realtor slash start interviewing realtors.

00:34:47.000 Can you talk about the importance of having a good realtor and how having a bad one can absolutely destroy your ability to procure property?

00:34:55.000 Man, this is a long topic.

00:34:57.000 Most realtors are going to be terrible.

00:34:58.000 I am a realtor.

00:34:59.000 I'm actually a broker, and they're probably my least favorite people in the world.

00:35:03.000 I hate going to realtor events.

00:35:05.000 Most of them are very pretentious.

00:35:06.000 They're trying to build themselves up to be a bigger deal than they really are.

00:35:10.000 They're trying to wear the nicest clothes they can, the flashiest jewelry, drive the nicest car, because they're compensating for the fact they don't really know that much about real estate.

00:35:17.000 What's that show in LA? Selling Sunset.

00:35:19.000 There you go.

00:35:20.000 They try to be like that, pretty much.

00:35:22.000 Yeah, that's exactly right.

00:35:23.000 And most of them will sell no houses.

00:35:26.000 I think at the office I work at, we have 100 realtors.

00:35:28.000 About 50 of them sell zero houses a year.

00:35:31.000 Another 30 sell one to three.

00:35:33.000 There's nothing you're ever going to be good at if you do it one to three times a year.

00:35:36.000 And that puts you in the top like 70% of the agents that are in the office.

00:35:40.000 The bar to get into becoming a realtor is way too low. 0.99

00:35:44.000 It is stupid easy. 0.99

00:35:46.000 And everybody flocks into that industry and it's all about show. 1.00

00:35:49.000 It's all about their social media and the way that they present themselves, but they don't actually know what they're doing.

00:35:54.000 And they're not getting paid unless that deal closes.

00:35:57.000 So you either have a realtor who's not very good at their job and desperate for money and is going to tell you whatever you want to hear in order to get that deal closed.

00:36:04.000 Or you have a realtor that's really good and they're going to be able to shoot straight with you because they don't need the paycheck, but they're probably not going to answer their phone the second that you call every single time.

00:36:11.000 You've got to pick and choose which direction you're going to go there.

00:36:15.000 Yeah.

00:36:15.000 And the thing with realtors, guys, is, you know, not to make fun of, you know, people, but when we have our show, how many girls come on the show and say I'm a realtor on the side?

00:36:24.000 It's a job that you can get part-time, guys, and let's be honest here, if you're doing something part-time, you're never going to be that good at it.

00:36:29.000 So I would say one thing you can use to filter out is hire a full-time realtor.

00:36:34.000 Don't hire the hot girl down the street that was referred to you because you want to get laid. 1.00

00:36:38.000 No.

00:36:39.000 Hire a realtor that does a full-time, that's experience, and preferably you want to deal with a realtor that works with investors because they're going to have a different mindset.

00:36:48.000 Buying a house as an investor, guys, versus buying a house just to live in are two different things, and you're looking for different things when you're trying to invest in it versus living in it.

00:36:57.000 And yeah, first, you might be buying it as living in it and as an investor, but you want to make sure that you're buying it with that investor head-on as well.

00:37:04.000 What you should do is do your research for yourself.

00:37:07.000 Go on YouTube, Google, BiggerPockets, read his book, right?

00:37:10.000 Learn about the terms and also the terminologies you need to learn in that space.

00:37:15.000 For example, multifamily investing.

00:37:17.000 You know, getting the loans.

00:37:19.000 What's FHA? What's conventional?

00:37:21.000 You know, for example, how many doors do you need?

00:37:23.000 How much is residential?

00:37:23.000 How much is commercial?

00:37:24.000 These terms that you want to know...

00:37:26.000 I asked the realtor, listen man, this is what I want to do in the future.

00:37:29.000 These are my plans.

00:37:30.000 Can you help me?

00:37:31.000 And he's going to tell you, hey man, I need to do like residential or commercial or I need to do like single family.

00:37:37.000 Perfect.

00:37:37.000 You're not for me.

00:37:38.000 You don't match my terms or my terminology.

00:37:40.000 Once again, if you don't know what to do at the very beginning, how are you going to question him to figure out if he's good for you or not?

00:37:45.000 Yeah.

00:37:46.000 He won't know.

00:37:47.000 So you need to learn for yourself first, then ask the realtor certain questions.

00:37:50.000 Now I'm in this position myself because I buy houses in other states.

00:37:53.000 And so I'm interviewing realtors for the different places I'm going to go buy.

00:37:56.000 Yeah.

00:37:56.000 And I gotta figure out the same thing that the listeners do.

00:37:59.000 It's funny.

00:38:00.000 My realtor, I met him at Toastmasters.

00:38:02.000 So back in the day, I was trying to do more public speaking, become a little bit better at speaking.

00:38:07.000 And I met him when he was like, I'm having a realtor.

00:38:09.000 Then years past, he has multiple properties, Airbnbs, multifamily. 0.99

00:38:13.000 I'm like, damn, bro, you're killing it. 0.99

00:38:15.000 I want to buy a property. 1.00

00:38:16.000 I got you, bro.

00:38:17.000 This is what I want to do.

00:38:19.000 Can you help me here?

00:38:20.000 Don't worry, but I got you.

00:38:21.000 And that was it.

00:38:23.000 My favorite question to ask is what works in this market?

00:38:27.000 Because if they're not selling a lot of houses and they don't have their finger on the pulse, they do not know how to answer it, you're going to get a long pause.

00:38:34.000 What does work in this market?

00:38:35.000 They're going to buy time.

00:38:36.000 They're going to give you a BS answer.

00:38:38.000 I know right away they're not selling a lot of houses and they don't know.

00:38:41.000 You want the realtor that's going to tell you, I know what you want to do.

00:38:43.000 That does not work here.

00:38:46.000 If they know that houses sit on the market for six or seven days and they get multiple offers and you say, hey, I want to write at 20% under what it's listed at, a good realtor is going to say, bad idea.

00:38:56.000 Don't waste your time.

00:38:57.000 If that's what you want, let's just not even go after it.

00:38:59.000 Or we can do that if we chase a house that's been sitting on the market three months.

00:39:02.000 But the houses that you like, these really pretty ones, you can't go in there with a really low offer.

00:39:06.000 You have to be aggressive with it.

00:39:08.000 The less that your realtor will push back on you, usually the weaker they are.

00:39:12.000 And they compensate that by being really nice.

00:39:15.000 And really friendly and very accommodating.

00:39:17.000 So what I tell the people on my team is we are not waiters.

00:39:20.000 You do not go up to the client and say, would you like Coke or Pepsi?

00:39:23.000 Can I get you anything else?

00:39:24.000 Oh, you'd like some more salsa?

00:39:25.000 I'll be right back with that.

00:39:26.000 The more they're doing that, the less in control they are of the market and knowing the inventory and giving the better advice to their clients.

00:39:33.000 You're hiring a professional who's supposed to be educated and understand.

00:39:36.000 That's a very good fact, because a good realtor is willing to tell you no.

00:39:38.000 Yes.

00:39:39.000 That is a key telltale sign.

00:39:41.000 They need to tell you no.

00:39:42.000 If they can say no to you, sorry man, this won't work.

00:39:44.000 And here's the thing.

00:39:45.000 The reason why it's important for them to say no to you is because if they say no to you, that's when you get more creative.

00:39:50.000 Okay, we can't go this route, but let's go, what about this?

00:39:53.000 Yes.

00:39:54.000 Oh, maybe that could work.

00:39:55.000 For example, alright, the numbers don't work on this property.

00:39:57.000 Right now, I'll give you all an example using myself. 0.97

00:40:00.000 Right now, the market in Miami is fucking crazy. 0.99

00:40:02.000 Terrible. 0.99

00:40:02.000 Interest rates are too goddamn high for you to buy a deal and have it actually cash flow or be worth it, right? 0.99

00:40:08.000 We're talking about cash on cash returns of like 5%, which is fucking trash, right? 0.99

00:40:12.000 So, working with Roger, I'm like, you know what? 0.97

00:40:15.000 Since interest rates suck, let's go ahead and try to do owner financing, which is basically the owner becomes the bank, and you can negotiate a way better interest rate.

00:40:24.000 Yeah, you have to put more money down, and then you have to do something called a balloon payment at the end, right?

00:40:29.000 Or you...

00:40:30.000 Long story short, we're going to make an offer for a house where it's five years, right?

00:40:35.000 Five years where I pay as if I'm on a 30-year loan, so the payments are for what I would pay as if it was a 30-year loan at a fixed rate of 4%, right?

00:40:42.000 And then at the end, I got to do a balloon payment of five years, which is going to be a couple hundred thousand.

00:40:46.000 But...

00:40:47.000 During that time, I'm making a bunch of cash flow.

00:40:49.000 It's like a 12, 13% cash on cash.

00:40:52.000 And then the house is going to appreciate it because I know this market is on fire.

00:40:55.000 And if at the end of the five-year term, I don't have the money to balloon payment, I can easily cash out, refi one of my 14 other houses and just pay that thing off.

00:41:04.000 And now I'm good.

00:41:05.000 What's the best part, bro?

00:41:06.000 You got the property.

00:41:07.000 And I got the property.

00:41:07.000 At all costs.

00:41:08.000 Yeah.

00:41:09.000 But this is where you start getting, this is where you can spitball with your real estate agent, and you can come up with strategies on how to do this.

00:41:15.000 So we're in the process right now of doing this for one of the houses, guys.

00:41:17.000 But you're not going to be able to do this if you're with someone that's always telling you yes, with someone that's not experienced, and someone that's most importantly not creative.

00:41:23.000 You get creative when you're told no.

00:41:25.000 That's a good point.

00:41:26.000 So that's something that you can also look into as well.

00:41:29.000 And also, time isn't your friend either.

00:41:31.000 If they're going to waste time going back and forth with you, versus actually doing the steps to educate the property, what's the point?

00:41:35.000 Yeah.

00:41:36.000 And owner financing, guys, is something.

00:41:38.000 We talked about it with Justin to a pretty good degree.

00:41:41.000 Justin Waller.

00:41:42.000 But that's an option that you can go when you have a market like this that it's very difficult to find cash flow where you basically go.

00:41:48.000 And the owner is basically the bank that you buy from.

00:41:51.000 But you're able to negotiate way better terms, way better interest rates, etc.

00:41:56.000 And David, you made a very good point earlier.

00:41:57.000 You said realtors have to have people skills.

00:42:00.000 I feel like most people think it's just like, okay, I'm going to go there, meet a client, and sell a house.

00:42:04.000 No.

00:42:04.000 It's building relationships, having a network as well, and delegating for things to happen.

00:42:09.000 Imagine that you work at a restaurant, you're a waiter, you have to know the menu, you have to know how the kitchen works, you have to be able to talk to the clients, you have to be able to handle the register, and now...

00:42:19.000 Nobody comes in the restaurant on their own and sits at your table.

00:42:21.000 You have to leave the restaurant, go outside, and find someone to convince them why they should come eat at your restaurant and then do the whole job.

00:42:28.000 Very few people in the world are prepared for a situation like that.

00:42:32.000 Almost all of us have had W-2 jobs that somebody came to us and then we just closed the deal.

00:42:37.000 As a realtor, no one brings you leads.

00:42:39.000 You have to go hunt, find the client, convince them to eat at your restaurant, and then do that entire job and hope that they order something.

00:42:45.000 They might just want to sit there and listen to the music and look at the girls and drink and waste your time. 1.00

00:42:49.000 That's exactly right.

00:42:50.000 It's very hard to find a person that can do that job.

00:42:52.000 People forget it's the marketing network that makes a realtor.

00:42:56.000 Because without that, it's just sales.

00:42:59.000 Alright, so step three now.

00:43:00.000 Okay, you got your realtor.

00:43:02.000 You're gonna start looking for a house.

00:43:04.000 And I'm saying this, I'd like to get your guys' take on it.

00:43:07.000 Look for a house approximately 20% of your max qualifying number.

00:43:11.000 So let's say you get a house and you're approved for a max of 100,000.

00:43:16.000 I would say look for a house at 80k purchase price to be safe.

00:43:21.000 Can you get more than that?

00:43:22.000 And you could be a little bit more risky, of course.

00:43:23.000 But I'm saying to be safe here, err on this side of caution.

00:43:27.000 And actually that works out pretty well because we had come up earlier with that number where you should have 20% ready to go.

00:43:32.000 So let's say you guys are going to buy a house, etc.

00:43:35.000 And you get qualified for $100,000 up to $100,000 loan.

00:43:39.000 You should go ahead and look at a house that's about 80K. Is what you should be doing.

00:43:43.000 Because that way it gives you wiggle room if something happens.

00:43:46.000 This is where your debt to income ratio comes into place.

00:43:48.000 Let's say you're already paying a mortgage or you're paying a renter.

00:43:51.000 Because you're going to have some bills that are recurring every month that's going to hit you with the income to debt ratio.

00:43:55.000 So to be safe, you don't want to go ahead and max out how much house you can afford.

00:43:59.000 You want to be comfortably below that so you can actually afford it should something happen.

00:44:05.000 I think you start at where you're saying, and then that's what you aim for, unless you find something that if you paid more, it would cash flow more.

00:44:12.000 There you go.

00:44:13.000 And that's a fantastic caveat to that.

00:44:16.000 If you're going to go ahead and go above that 80% threshold, hopefully you can make that back on the cash flow from the house.

00:44:23.000 Yeah, because sometimes you pay a little more for a house that has a whole other unit.

00:44:26.000 Yeah.

00:44:26.000 So your mortgage goes up by $150 spending a little bit more money, but that unit brings in $1,000 in cash flow, that's a good financial decision.

00:44:33.000 Yeah, then you absolutely do it.

00:44:34.000 Don't do it because the kitchen looks better or you like the paint color more.

00:44:38.000 Those are the wrong reasons to spend more in-house.

00:44:40.000 Yeah, and I agree with you on that one.

00:44:41.000 And a lot of lenders a lot of times will take that into account, the cash that comes in from the house, so that could help you as well, or market rents or whatever it may be.

00:44:51.000 But to be safe, guys, let's say you're going to buy a house and it's a single family home and you're not going to have tenants in there, then maybe this 80% of what you afford can work.

00:45:00.000 Cheapest house you can live with.

00:45:01.000 Yeah, if it's a single family home.

00:45:03.000 But if it's a duplex or triplex, fourplex, then you can go ahead and afford to be a little bit above that 80% because the money that you're getting from your tenants will offset that percentage that you're going over.

00:45:13.000 Okay, so now we're on step four.

00:45:15.000 Okay, this is super important. 0.99

00:45:18.000 Oh shit, shout out to Rumble, man. 0.98

00:45:20.000 We got our Rumble plaques right here. 0.99

00:45:23.000 This is like the equivalent to the YouTube plaques.

00:45:28.000 Shout out to Rumble, man.

00:45:29.000 We're going to be with them tomorrow.

00:45:31.000 You need to get a Rumble too, man.

00:45:33.000 He makes clean content.

00:45:35.000 David Green.

00:45:36.000 He's green, bro.

00:45:37.000 He's not crazy like us.

00:45:38.000 I do like the color of it, though.

00:45:40.000 Number four, guys, is underwrite the deal or calculate the cash flow.

00:45:45.000 This is where you figure out your cash on cash returns, cap rates, etc.

00:45:49.000 You could talk more about cap rates because you're in the commercial game, right?

00:45:53.000 I dabble in it.

00:45:54.000 I'm not super, super into it.

00:45:56.000 Can you explain what those words mean?

00:45:58.000 A cap rate, this is a good question and it confuses a lot of people.

00:46:02.000 It is a measurement of how much demand there is for that asset or that income stream at this time.

00:46:07.000 So imagine if you're buying a million dollar commercial property, and if it would bring in an 8% return, if you paid cash for it, it would be an 8 cap.

00:46:18.000 That's what we would call it.

00:46:18.000 If it would bring in a 6% return, if you paid cash for it, that would be a 6 cap.

00:46:22.000 So the lower that that return is, The more demand there is for that asset.

00:46:28.000 Because more people want it.

00:46:30.000 So the higher price they pay means the lower of a return they're going to get.

00:46:34.000 I know that this can be confusing, right?

00:46:35.000 Because we would typically say a better cap number is better because I'm going to make more money.

00:46:40.000 But the higher numbers draw more buyers, which pushes the price up, which pushes the cap rate lower.

00:46:45.000 So if something's trading at a 4 cap, that means a lot of people want it.

00:46:49.000 So it's very desirable, and it's harder to get, so it's going to be less profitable for you.

00:46:54.000 Now, the idea is you want to try to buy something at a higher cap rate, like an 8, a 9, and then the market moves in your direction.

00:47:00.000 Like, let's say you bought something out here in this neighborhood of Miami 15 years ago.

00:47:03.000 It wasn't as popular.

00:47:04.000 You wouldn't have to pay as much for it, so the return you get on your investment would be higher.

00:47:08.000 Well, now it's very popular.

00:47:09.000 Everybody wants these properties.

00:47:11.000 That's going to push the cap rate lower, which makes the property worth more.

00:47:15.000 And cap rate, guys, is often used with commercial real estate.

00:47:20.000 I've seen people use it for residential as well, but that's more of a commercial term, which commercial is not my expertise at all.

00:47:26.000 I'm a residential guy.

00:47:27.000 Yeah, people conflate that with cash on cash return.

00:47:30.000 They'll often use the word cap rate.

00:47:31.000 What they're referring to is a cash on cash return residential real estate.

00:47:35.000 And that's one of the red flags that when I hear someone who tells me that they're an investor and they talk about cap rates with residential...

00:47:40.000 Retards. 1.00

00:47:41.000 Yes.

00:47:42.000 I'll be less nice about it.

00:47:43.000 Yeah, if you're using cap rate and you're using it interchangeably with cash-on-cash returns, they're not the same at all.

00:47:50.000 Actually, you know what?

00:47:51.000 I've explained cash-on-cash a bunch of times, but can you go ahead and give the people a refresher?

00:47:55.000 What's a cash-on-cash return?

00:47:56.000 Yeah, cash-on-cash return is a way of measuring how much money you're going to get paid for how much you put in it.

00:48:00.000 And it's necessary because you're going to have different investment opportunities and you're going to want to compare if I put my money in a bank, if I put it in a CD, if I buy stocks, if I buy real estate, which one's going to pay me the most?

00:48:09.000 That's why we do this.

00:48:10.000 To calculate it on real estate, you're basically going to take the income the property makes...

00:48:15.000 Subtract the expenses, and if it's a positive number, that's your cash flow.

00:48:18.000 That's how much you make every single month.

00:48:20.000 You're going to multiply that by 12, because that's how much you're going to make in a year, and you're going to divide it by the money that you put into the deal.

00:48:27.000 Your down payment, your closing costs, and how much money you spent to get the property up.

00:48:31.000 And the goal is to get that number as high as you can.

00:48:34.000 Because there's two metrics that determine the cash on cash return, which is the cash flow and how much money you put in, you've got two ways to improve it.

00:48:41.000 You improve the cash flow, or you decrease the amount of money that you put in the deal.

00:48:45.000 Yep.

00:48:45.000 So that's how we become creative with real estate.

00:48:47.000 Like the BRRRR method is one of the strategies that I talk about where when you refinance money out of the deal, once you're done with it, you have less money in, which means your cash on cash return will go up.

00:48:55.000 It skyrockets.

00:48:56.000 Yeah.

00:48:56.000 Or you wait for rents to increase in certain markets and the cash flow goes up and that'll increase your cash on cash return as well.

00:49:01.000 Now, to simplify for the people, right?

00:49:02.000 So let's go ahead and actually give them tangible numbers so they can go with it.

00:49:05.000 Let's say you buy a house for $100,000, right?

00:49:08.000 $100,000, right?

00:49:09.000 And the house generates $2,000 total gross, okay?

00:49:15.000 But your expenses are $1,000.

00:49:18.000 So you profit $1,000.

00:49:22.000 $1,000 times 12 is $12,000.

00:49:26.000 But you put in, let's say, to get the deal, you put in $20,000, right?

00:49:32.000 You took $12,000.

00:49:34.000 Yep, so you profit $12,000, but you put $20,000 into the deal to acquire the home.

00:49:38.000 Right.

00:49:38.000 That gives you a cash-on-cash return of 6%.

00:49:42.000 60.

00:49:43.000 60%. 1.00

00:49:43.000 Sorry, shit. 1.00

00:49:44.000 60%, 0.6%. 1.00

00:49:45.000 So, that's crazy!

00:49:46.000 You ain't gonna get nothing that high.

00:49:47.000 But I did that for easy numbers for y'all.

00:49:49.000 A more sustainable number is, yeah, you ain't gonna get no 60.

00:49:52.000 Maybe you put a hundred grand in to get that deal.

00:49:54.000 Right.

00:49:54.000 So you make $12,000, you divide that by the $100,000 that you put into it, and that's gonna be a 12% return.

00:50:00.000 That's more realistic.

00:50:01.000 Which that's actually a fantastic return. 0.89

00:50:03.000 But I did that for easy numbers because my math sucks.

00:50:05.000 But you guys get the idea.

00:50:06.000 The cash on cash is basically how much cash did you put into the deal to acquire the house.

00:50:10.000 That does not count for the money that the bank gave you.

00:50:12.000 It's how much money did you put in.

00:50:13.000 So if you spend $100,000, but you're making $12,000 a year.

00:50:19.000 Profit, by the way, this is not total.

00:50:21.000 This is not all the money coming in.

00:50:22.000 After you pay all your bills, you're making $12,000 a year.

00:50:24.000 You're basically getting a 12% cash on cash return.

00:50:27.000 Which is actually fantastic.

00:50:29.000 I'd say anything above what?

00:50:31.000 I'd say 8% and above?

00:50:32.000 8% solid, especially today.

00:50:34.000 Most properties lose money if you're looking at them.

00:50:36.000 You get 12%, that's a very, very good return.

00:50:38.000 I used to be 10% or above, but with the higher interest rates and the competitiveness of the market, if you're getting 8% cash on cash or higher, I'd say that's a fantastic deal.

00:50:47.000 You should take it.

00:50:47.000 Yeah, these are benchmarks that we shoot for, but there are things that will change that, right?

00:50:51.000 You may accept a 2% cash-on-cash return if you're buying into the hottest neighborhood of Miami where you believe, like, man, rents are going to skyrocket, the value's going up.

00:51:00.000 Or maybe you're buying in Kansas somewhere in a big, huge field where it's never going up.

00:51:05.000 12% might not be worth it for me.

00:51:07.000 If the value's never going up and the rents aren't going up, maybe I need to see a 20% cash-on-cash return to feel good.

00:51:12.000 But it is a good baseline to start at.

00:51:14.000 That 8% to 12% number is a good deal. 0.84

00:51:16.000 It's a good foundation.

00:51:17.000 Yes.

00:51:18.000 So are you going to get a.6 cash on cash return, guys?

00:51:21.000 No, you ain't.

00:51:22.000 Probably not.

00:51:22.000 But the idea here is to teach you how to calculate it.

00:51:25.000 Your profit, not gross, your profit divided by how much cash you put in is what gives you your cash on cash return.

00:51:31.000 And if you can get that number to 8% or higher, fantastic.

00:51:34.000 What that means is you're getting back 8% of your investment every year.

00:51:37.000 Yes.

00:51:38.000 Can you imagine your realtor talking about cap rate on a resident presidential?

00:51:42.000 Yeah.

00:51:42.000 Bruh.

00:51:43.000 That's an L. Okay.

00:51:45.000 Now we are on step five.

00:51:47.000 We're midway here, guys.

00:51:48.000 Okay?

00:51:52.000 Number five is, if numbers make sense, 8% cash on cash or higher, make a strong offer, okay?

00:52:01.000 Don't lowball.

00:52:01.000 It will get you ignored if the house is valuable.

00:52:04.000 So, this is important, guys.

00:52:05.000 So, you got pre-qualified.

00:52:08.000 You got your real estate agent.

00:52:09.000 You're looking at houses.

00:52:10.000 You find a deal.

00:52:11.000 You run the numbers.

00:52:13.000 You figure out that, oh my God, I'm going to be getting 8% cash on cash on this thing.

00:52:16.000 If I do it, I'm going to need this much money, blah, blah, blah. 0.64

00:52:19.000 Redfin has a fantastic mortgage calculator that you can use to figure this crap out.

00:52:22.000 Right?

00:52:23.000 And there's a bunch of mortgage calculators you can use.

00:52:25.000 You figure it out, 8% plus, cool.

00:52:28.000 Now it's time to make an offer with your real estate agent.

00:52:31.000 I would say this is where it makes a brick cute with your realtor.

00:52:34.000 He should shine for you if he knows what he's doing. 0.74

00:52:38.000 Dave, I'll let you take it from here as far as making a strong offer, etc., and how to go about this properly, because so many people fucked this up.

00:52:43.000 Okay, I'm trying to give a good analogy for you guys.

00:52:46.000 You guys are a dating podcast.

00:52:48.000 Say you got a girl that just hit the market, just broke up with her boyfriend.

00:52:53.000 She's not a girl that a whole lot of guys are going to be interested in. 0.52

00:52:56.000 So are you going to go and say, hey, I'll take you to the most expensive steakhouse and you're going to jump on it in like 30 minutes after she posted that she's single? 1.00

00:53:04.000 Probably not going to be something that you need to do.

00:53:06.000 But let's say this is like a high quality woman that a lot of people are going to be interested in. 1.00

00:53:10.000 You know this person's character.

00:53:11.000 Does it make sense to say, hey, I'll take you to McDonald's?

00:53:14.000 Someone else is going to come along and they're going to say, I'll take you somewhere better.

00:53:17.000 I'll show a better investment.

00:53:18.000 He's going to call her when you texted, right?

00:53:20.000 There isn't a rule that you could follow of how you're supposed to ask out a girl or how you're supposed to buy a house.

00:53:26.000 You need to look at the supply and demand dynamics of this.

00:53:30.000 So to simplify, and this is, I don't know why no one talks about it, but working as a realtor for as long as I have, what I've learned is the number one thing you want to look at is the days on market.

00:53:41.000 Yes.

00:53:41.000 Okay?

00:53:41.000 That house.

00:53:42.000 Sheesh.

00:53:43.000 It smells like...

00:54:01.000 Cat urine.

00:54:02.000 It's a hoarder house.

00:54:03.000 It's been on the market for six months and nobody wants it. 1.00

00:54:05.000 You'd be stupid to go pay full price for that house. 0.93

00:54:08.000 But what people do is they hear this stuff and they go, well, I'm just going to throw a million lowball offers and one of them is eventually going to stick because they're just too intellectually lazy to ask why did it stick and what should I go do? 0.99

00:54:20.000 So asking yourself how desirable that house is, how many other investors are going to want it will help you know.

00:54:24.000 I mean, I pay over asking price for houses.

00:54:26.000 Yeah.

00:54:27.000 Frequently.

00:54:28.000 That's what happens.

00:54:28.000 I've had times where I bought, I paid over the list price, and it appraised for more than what I offered on it.

00:54:34.000 Right?

00:54:34.000 Yeah.

00:54:35.000 So, like, the list price is not how much the house is worth.

00:54:37.000 That's just, like, a suggestion the realtor's starting with.

00:54:40.000 If it's been on the market a long time, you should offer less than the list price, and if it's Just hit the market, high quality house, very rare location, going to perform very well.

00:54:48.000 It is okay to pay over asking price.

00:54:49.000 I would argue the property's worth its weight in gold, and your realtor's telling you, listen man, don't waste time on this.

00:54:55.000 If you've got to pay a little more, get it.

00:54:56.000 Just to secure it, do it.

00:54:58.000 Don't waste time, because like I said before, if she's a virgin, she's actually going to be worth the weight. 1.00

00:55:03.000 Why are you taking her to McDonald's? 1.00

00:55:05.000 That'd be stupid, right? 1.00

00:55:06.000 Yeah, Cheesecake Factory. 0.99

00:55:08.000 And I'll say this too, because I actually literally just dealt with this on my last house that I closed last week.

00:55:13.000 The contract, I think they wanted like $4.40 or $4.45 or something like that.

00:55:18.000 We offered $4.50.

00:55:20.000 Got the deal accepted.

00:55:22.000 Got the house.

00:55:23.000 When we did the appraisal, it came back at $4.50.

00:55:26.000 So it actually came back as what I offered, which is over-asking.

00:55:29.000 And that's what it is sometimes, guys.

00:55:32.000 Because keep in mind, when you're in a hot real estate market, you got people saying, oh, I'll offer cash.

00:55:36.000 I'll go ahead and waive any contingencies. 0.97

00:55:39.000 So if the inspection comes back fucked up, I don't care. 0.97

00:55:41.000 If it appraises for less, I don't care. 0.98

00:55:43.000 So all these things are more attractive to the seller because they're like, wow, this guy's waiving contingencies?

00:55:47.000 So that means that we're gonna do this deal no matter what?

00:55:50.000 Or this guy's offering cash, which means I don't gotta deal with a bank.

00:55:54.000 I'm gonna get my money in two weeks.

00:55:55.000 Wow.

00:55:55.000 These are the types of people that you're competing with a lot of the times.

00:55:59.000 And the only way that you're gonna override it is a lot of times you have to offer more is what it comes down to.

00:56:03.000 But if the house is worth it, Do it.

00:56:07.000 And the other thing, too, is that if you go ahead, because some of y'all will go ahead and say, oh, I'm just going to send a lowball offer in, you're not going to get a callback, bro.

00:56:12.000 In a hot real estate market where it is a seller's market, you send lowball offers, etc., they're not going to take you seriously.

00:56:18.000 They're not even going to respond.

00:56:19.000 They're just going to ignore you, and you're going to lose deals because you want to be a cheapskate.

00:56:22.000 People forget, there's BlackRock, other investors that are from out of town, out of state, out of country, willing to pay more to secure a good property.

00:56:30.000 And if you don't want to do it yourself, they'll do it for you.

00:56:32.000 So I think on some level, if the property's worth its weight in gold, don't waste time.

00:56:35.000 But a realtor should tell you, listen bro.

00:56:37.000 That's where a good realtor comes in and tells you.

00:56:39.000 They have to be good though.

00:56:39.000 Yes, because they have to know...

00:56:41.000 Vice versa, for example, you could say, you know what?

00:56:43.000 I got like $120,000 I could put on this property, but you should put like $200,000 because it's worth...

00:56:51.000 He'll tell you, you know what?

00:56:52.000 This property's worth paying more, so do it.

00:56:55.000 A good realtor will know the market.

00:56:56.000 They'll tell you, I went to look at the house and there were 10 other people there.

00:57:00.000 They'll tell you.

00:57:01.000 The realtor that's selling the house is inundated with offers.

00:57:04.000 We need to offer this much to be competitive.

00:57:07.000 That's what a good realtor can do.

00:57:08.000 They can assess the house immediately and tell you, yo, we need to offer this to actually be competitive.

00:57:12.000 Versus you tell them what you want to put.

00:57:14.000 Nah, bro.

00:57:14.000 Don't waste time.

00:57:15.000 Put this amount.

00:57:16.000 Let's go.

00:57:17.000 That's really a huge piece that goes on behind the curtain.

00:57:17.000 Exactly.

00:57:20.000 So when I was representing clients, still the people that I'm teaching right now, It is a skill to get that listing agent to tell you what price you'd get the property for.

00:57:28.000 So if I'm representing Myron, he wants this property at $4.50.

00:57:31.000 He obviously doesn't want to pay more than he has to, but he doesn't want to lose it.

00:57:35.000 It's a delicate balance.

00:57:37.000 Yes, that's exactly right.

00:57:38.000 What most realtors do is say, well, just tell me what are you We'll submit the offer and we'll just see what happens.

00:57:43.000 That's not what you want.

00:57:45.000 I would call the listing agent and I would say, hey, what is it going to take to put this donor contract right now?

00:57:49.000 And they're going to give you some BS. They're like, well, submit your offer.

00:57:52.000 Write your highest and best.

00:57:53.000 We'll see how it goes.

00:57:54.000 No, he's not going to do that.

00:57:55.000 He's going to go buy another house.

00:57:56.000 But this guy will do whatever I say.

00:57:59.000 Is $475 where we need to be?

00:58:01.000 Would you guys do that?

00:58:02.000 He might if I told him to.

00:58:03.000 Would that actually work?

00:58:04.000 Now he hesitated.

00:58:06.000 He said, would he really do that?

00:58:07.000 He doesn't have offers anywhere near that.

00:58:09.000 Right?

00:58:09.000 What about $455?

00:58:11.000 No, I think it'd have to be higher.

00:58:12.000 Why don't you call your client right now and ask him what price it'd have to be for us to get this deal done right now?

00:58:17.000 And there's, from the outside looking in, this sounds like you're not representing your client, but what you have to understand is, when there is only you trying to buy the house, it is you versus the seller.

00:58:25.000 And at that point, you're trying to write the lowest offer you can get away with.

00:58:28.000 But when there's 10 other buyers, it is you versus those 10 other buyers.

00:58:32.000 You have to beat them.

00:58:33.000 And that's where a good realtor will help you figure out what price we need to be.

00:58:37.000 And then I could go back to Myron and say, hey, $4.75, you can get it.

00:58:40.000 If not, let's just walk away and not waste our time.

00:58:42.000 Now, he can make a decision on impact price.

00:58:44.000 He can go put the numbers in his calculator.

00:58:45.000 He can figure out if he likes it.

00:58:47.000 If he doesn't, let's just go.

00:58:48.000 We're not going to write an offer and hold our breath and hope that we get it.

00:58:51.000 And then we're going to get a counter that says another chance to write an even higher offer because they're turning it into an auction.

00:58:56.000 And an even better realtor, and my realtor out in Connecticut does this for me.

00:58:59.000 She underwrites the deal before she makes the offer.

00:59:01.000 She says, hey look, this house is making this amount.

00:59:05.000 We need to offer this much.

00:59:06.000 You're probably going to get this return.

00:59:08.000 Let's do it. 1.00

00:59:08.000 Damn. 1.00

00:59:09.000 It's gotten to that point now. 0.99

00:59:10.000 So she's literally like, she's like, this house generates this amount of money, or let's say it generates a certain amount of money, but she's like, this is way below market rent.

00:59:17.000 We'll kick these tenants out or raise the rent on them, right?

00:59:20.000 Well, it can't come out, but you get what I'm saying.

00:59:22.000 We'll raise the rent on them and or get new tenants and we'll be where we need to be.

00:59:26.000 Yeah, a month or two of maybe vacancy, but it's worth it.

00:59:28.000 We should offer this much, we're going to make this much, and we can get the rents at this much because I know the competent area.

00:59:33.000 You want a real estate agent that's competent also and knows what rent is going in that area and knows what you can get for that house.

00:59:38.000 That's important.

00:59:39.000 But notice, there's a synergy between you and the realtor.

00:59:41.000 Yeah.

00:59:42.000 She knows what you want indefinitely.

00:59:43.000 Yeah.

00:59:44.000 So it's kind of like, okay, Maya wants this, don't waste any time, let's go with this.

00:59:48.000 Yeah.

00:59:48.000 And that's my realtor in Connecticut.

00:59:49.000 Now in Miami, same exact thing.

00:59:51.000 Me and Roger are doing the same thing where he knows what we're trying to get.

00:59:54.000 My standards aren't as...

00:59:56.000 I'm not trying to get as high of a return in Miami because it's such a competitive market.

01:00:00.000 So I'm willing to do below 10% cash on cash returns.

01:00:04.000 But he also knows what I'm looking at.

01:00:05.000 He's underwriting the deal before we even make an offer.

01:00:08.000 And what he'll do is...

01:00:09.000 He'll give me multiple scenarios.

01:00:11.000 Yo, if you put 20% down, this is how much you're gonna make per month.

01:00:13.000 If you put 25% down, this is how much you're gonna make per month.

01:00:16.000 This is, if we offer this amount, he's giving me different scenarios on what we should offer.

01:00:20.000 This is what you should, these are the conversations you need to be having with your real estate agent, guys.

01:00:23.000 Like where you're literally going over scenarios, what we should offer, blah, blah, blah.

01:00:27.000 Hey, we should probably offer this to be at the strongest level.

01:00:30.000 This house generates this amount of money, et cetera.

01:00:32.000 And you already know going into the deal, What you're offering, how much money you're probably going to make back, etc.

01:00:37.000 And you're calculating everything.

01:00:39.000 And every deal that I've closed, I've been pretty damn spot on with how much money I'm going to make after the deal's closed.

01:00:44.000 You don't want to be at the closing table figuring out, oh, I wonder what my cash on cash returns are going to be.

01:00:48.000 You should know that way before.

01:00:50.000 Way before.

01:00:50.000 That's a unicorn you got.

01:00:52.000 You better take good care of that realtor.

01:00:53.000 Yeah, yeah.

01:00:53.000 That's very rare to find that.

01:00:55.000 Here's a tip.

01:00:56.000 To add to finding a good realtor, recommendations go a long way.

01:01:00.000 Yeah.

01:01:00.000 So I might be looking for a realtor myself, but I don't know anyone in Miami.

01:01:04.000 But I know Myron.

01:01:05.000 My realtor called him 60 Properties.

01:01:08.000 Cool.

01:01:09.000 Myron, can you show me your info with your realtor?

01:01:11.000 Yeah.

01:01:11.000 Done.

01:01:12.000 Believe it or not, that's in the book, Pillars of Wealth.

01:01:14.000 I'm telling you.

01:01:15.000 What I'm talking about is, do you want to be the realtor that makes all the money?

01:01:19.000 You have to understand, you're not going to get just people walking up to you and saying, take my money.

01:01:23.000 Exactly.

01:01:23.000 You have to do such a good job that Myron tells everybody else, this is the realtor that you need to use to get that referral business coming your way.

01:01:31.000 And if you don't have that work ethic, if you don't have that attitude, if it's, oh, it's Friday at 7 o'clock, what's he bugging me with right now?

01:01:37.000 You're indirectly telling that person, I don't want your business, I don't want your referrals, I don't want the next 10 years of money I could be making.

01:01:44.000 We have this joke in our office that when someone doesn't answer their phone because they're eating lunch, that's probably a $10,000 sandwich that they just ate.

01:01:50.000 When you're in this type of an industry, you don't have the luxury of saying, I'm not working, it's the weekend, I'm off.

01:01:57.000 You guys understand that because you're putting in the hours.

01:02:00.000 Wealthy people take that approach.

01:02:01.000 Now, it doesn't mean you're going to work your life away.

01:02:03.000 You do have to have some mental health there, but if you're trying to be good at making money, the offense pillar, you have to understand that you need to be excellent.

01:02:10.000 You have to pursue excellence.

01:02:12.000 You have to fall in love with the process of becoming great.

01:02:14.000 Yeah.

01:02:15.000 So that's very important, guys.

01:02:18.000 Make good offers, and that offer should be contingent directly on the value of the property.

01:02:24.000 Don't lowball a house that's going to get you a 10% cash-on-cash return so that you can try to make 13%, right?

01:02:31.000 When you easily can make 12 or 11 at a better offer, and you acquire the home.

01:02:36.000 You know, and then there's other things in place as well.

01:02:38.000 Like I said, you could come in and increase the rents, right?

01:02:40.000 If they're paying rent, you could value add.

01:02:42.000 You can do, Dave gave the ADU, which is, I didn't even think about that, where you can put a, you said it's called an accessory dwelling unit.

01:02:50.000 Yeah, so these are all ways that you can increase.

01:02:53.000 Hell, I've done it before where we, you charge for parking.

01:02:57.000 You can go ahead and add in a parking fee to increase the cash flow.

01:03:02.000 There's many creative ways.

01:03:03.000 You finesser, dog.

01:03:04.000 It's all legal, man.

01:03:05.000 Well, he understands the fundamentals.

01:03:07.000 We said earlier, you have income, you have expenses.

01:03:09.000 You're trying to get that cash-on-cash return as high as you can.

01:03:12.000 You increase your cash flow by bumping up your income.

01:03:15.000 And by decreasing your expenses.

01:03:17.000 You add these little units, all that does is bump up the income.

01:03:21.000 And those are literally the principles that are in that book.

01:03:23.000 You want to be able to make more money, and you want to be able to save more of the money that you make.

01:03:27.000 It's kind of like, remember the karate kid?

01:03:29.000 He's teaching them the wax on, wax off, and he doesn't know what he's learning is karate.

01:03:33.000 When you focus on these fundamentals, they make sense within real estate, they make sense within business, they make sense within your personal life.

01:03:39.000 Everything gets easier when you master this.

01:03:40.000 And I would say you're better off creating the cash flow than trying to save the cash flow.

01:03:46.000 And what I mean by that is, give the seller what the hell he wants if it's a good deal.

01:03:50.000 You become creative and find ways to maximize your profit once you acquire the property by raising rents, by ADUs, parking.

01:03:59.000 Hell, you could put a laundry thing in there to make money. 1.00

01:04:02.000 I know Grant Cardone talks about that all the time.

01:04:04.000 I added a washer dryer, raised a rent by quite a bit.

01:04:08.000 Yeah, so little things like that.

01:04:10.000 It's better to find ways to monetize, to increase the cash flow after you acquire the property versus telling the seller, hey, give it to me for a better deal.

01:04:17.000 That's what an amateur would do.

01:04:19.000 They just look at what's the list price, how much low can I get it for, and that's as far as they go.

01:04:23.000 The good operators understand the fundamentals of how this works, and they see it creatively.

01:04:27.000 So what we say on BiggerPockets, or what I say is, don't just look for a good deal, make a good deal.

01:04:33.000 Yep.

01:04:33.000 Bam.

01:04:34.000 Here's a saying that says, another man's trash is another man's treasure. 0.94

01:04:38.000 Yep.

01:04:38.000 And if you're smart enough and you're savvy, you can absolutely find more ways to make it a treasure.

01:04:42.000 Yeah.

01:04:43.000 And the biggest one, the easiest one, guys, a lot of times, when there's a hot real estate market, that means you can charge more rent.

01:04:48.000 Yes.

01:04:49.000 That's a great point.

01:04:50.000 Too many people look at real estate like, if I buy it right now, what am I going to get?

01:04:54.000 But look at the properties that I bought in 2010, about 13 years ago.

01:04:58.000 I bought a fourplex.

01:05:00.000 $260,000 is what I paid for it.

01:05:02.000 Rents were $800 a month.

01:05:04.000 Today, the rents are $2150 a month.

01:05:07.000 It's probably worth about $650,000.

01:05:09.000 I was going to say, everything's tripled.

01:05:11.000 Yes, and inflation does that. 0.98

01:05:13.000 Don't get just locked in with this tunnel vision of, where is it right now?

01:05:17.000 If you buy in the right locations, and there's constricted supply, but demand increases, like the market you guys are in right now where you're talking about.

01:05:24.000 People are moving into a business that are moving there.

01:05:26.000 You want to know where the rents are today because you don't want to lose money.

01:05:29.000 But you're not buying that property for today.

01:05:30.000 You're buying that property for the next 40 years.

01:05:32.000 Where are rents going?

01:05:33.000 Where are values going?

01:05:35.000 Yeah, the benefit, the negative of being in a hot market is you're paying more a lot of the times, but the other benefit is you can increase rents to compensate for that.

01:05:43.000 That's right.

01:05:44.000 And also, occupancy is going to be lower, because more people want to live there.

01:05:48.000 Now, if you are paying attention to what we're saying, you're recognizing that this is delayed gratification.

01:05:53.000 Oh, you meant vacancy is going to be lower.

01:05:54.000 The longer that you wait, the better that it's going to pay.

01:05:59.000 So what I'm saying people should do is think about, how do I survive?

01:06:03.000 How do I own that property for 10 years or 20 years?

01:06:06.000 If you barely, like your situation where you got lucky, you didn't have any money left over, you could have went into foreclosure pretty easy because you didn't have enough reserves, right?

01:06:14.000 But you wouldn't make that mistake again.

01:06:16.000 Don't buy a house and then think you're rich and go spend your money on dumb things.

01:06:20.000 Keep saving that money so that when things go wrong, you survive and you get to the point where rents are 2150 instead of $800 a month.

01:06:28.000 Well said.

01:06:28.000 Step six, okay?

01:06:31.000 You got the property, right?

01:06:33.000 You got your real estate agent.

01:06:35.000 You got the property.

01:06:35.000 You made a strong offer.

01:06:36.000 They accepted your offer.

01:06:37.000 Let's go!

01:06:38.000 Hooray! 0.97

01:06:38.000 Right? 0.97

01:06:39.000 You got the fucking house under contract. 1.00

01:06:39.000 Good. 1.00

01:06:42.000 Yeah!

01:06:43.000 Now, guys, when you got a house under contract, you're going to do something called inspections.

01:06:46.000 Okay?

01:06:47.000 You're going to hire someone.

01:06:48.000 They're going to come out. 0.99

01:06:48.000 They're going to do a fucking full-on diagnosis of the house. 0.99

01:06:52.000 They're going to go and check the roof. 0.99

01:06:53.000 They're going to check the windows.

01:06:54.000 They're going to check the AC unit.

01:06:55.000 They're going to check the house for any type of issues.

01:06:58.000 Okay?

01:06:59.000 And what ends up happening is, Most of the time, there's gonna be something wrong where, hey, this thing needs to be replaced, this thing needs to be fixed, this needs to be updated, etc.

01:07:10.000 This is your chance to go back to the seller and renegotiate.

01:07:14.000 The price, yeah.

01:07:15.000 Renegotiate the price.

01:07:15.000 Okay?

01:07:17.000 Now, with that said...

01:07:20.000 A lot of sellers are going to tell you, go pound sand.

01:07:21.000 I don't care.

01:07:22.000 I'm not lowering the price.

01:07:23.000 It is what it is.

01:07:24.000 But I say it's always worth asking, especially if it's something that's big.

01:07:28.000 If it's like a roof, hey, this is going to cost $10,000 to fix, et cetera.

01:07:33.000 That's where you can come in and say, hey, can we get a $10,000 credit at closing?

01:07:36.000 Termites.

01:07:37.000 You know, termites, right?

01:07:38.000 That's a big one that could come in, right?

01:07:40.000 Abestus.

01:07:40.000 Yeah.

01:07:42.000 Abestus.

01:07:42.000 We're not even buying them.

01:07:46.000 But the inspection period, guys, is where...

01:07:49.000 And also, it's a grace period where you're able to back out the deal if you want.

01:07:52.000 Like, if the inspection comes back and you don't like it, that's your way to get out, okay?

01:07:56.000 This is why sellers love it when you waive the inspection contingency, that even if the inspection doesn't come back the way that you want, you're staying in the deal.

01:08:03.000 So you can see how a seller would say, oh, well, if the inspection comes back fucked up, you're going to stay? 0.56

01:08:07.000 Oh, that's a W for me. 0.93

01:08:08.000 But the inspection, most of the time, in a general contract, is the opportunity... 0.93

01:08:11.000 When something comes back fucked up, that's your opportunity to renegotiate.

01:08:14.000 What are your thoughts on the inspections? 0.94

01:08:16.000 So inspections is like the dating period.

01:08:19.000 So that girl hit the market. 1.00

01:08:20.000 You got her under contract.

01:08:22.000 She agreed to the date.

01:08:23.000 Now you're going to try to figure out, is this marriage material or is this not a deal that I want to commit to long term?

01:08:28.000 You don't really know what you got until you get into the inspections.

01:08:31.000 Too many people are afraid to write an offer.

01:08:33.000 They're afraid to get into the thing because they think that writing an offer on a house is a commitment to marriage.

01:08:38.000 It's not even close to that.

01:08:39.000 It is one little step forward.

01:08:41.000 All an offer does, if you get it accepted, is give you the right to buy that house and get rid of all your competition.

01:08:47.000 It's a benefit for the buyer.

01:08:49.000 It's bad for the seller.

01:08:50.000 When they accept your offer, there's no guarantee that house is going to close.

01:08:55.000 But there is a guarantee that they can't market it to anybody else.

01:08:57.000 This is like you're dating the person now that's a single on their profile.

01:09:01.000 Technically, if this is an honest person, they can't date anyone else, but you don't have to marry them.

01:09:04.000 This is where the two people are going to get to know each other.

01:09:06.000 For the wrestling fans, you went from a Royal Rumble to a singles match.

01:09:10.000 It was literally everyone was fighting each other.

01:09:10.000 There you go.

01:09:13.000 It's mayhem.

01:09:14.000 Every man for himself.

01:09:15.000 What you've effectively done, you've turned it into a one-on-one fight now.

01:09:19.000 Hmm.

01:09:19.000 Yes.

01:09:20.000 It's a great way to put it.

01:09:21.000 So what you want to do is rush into a one-on-one fight and then slam the brakes on when you get there and take a good, long, hard look at what this thing is.

01:09:29.000 You're getting a home inspection.

01:09:30.000 You're getting a pest inspection.

01:09:31.000 You're getting a roof inspection.

01:09:32.000 You should get the sewer line scoped.

01:09:34.000 So a person will come in here with a little camera and they'll check to make sure that the sewer line isn't leaking as it goes out to connect to the The city, at the sewer lateral area, you can actually inspect what the rents are going to be.

01:09:43.000 You can dive deeper and ask the property manager, well, how much vacancy is there?

01:09:47.000 I know that my initial inspection showed I could get $1,500 a month, but what's my competition look like?

01:09:53.000 Is there a lot of other units for rent where maybe the tenant's not going to choose mine?

01:09:56.000 You get to inspect everything, assuming you have a contingency that allows you to back out of the deal.

01:10:01.000 If you don't have that, like my understanding, you're waiving contingencies, you're not forced to close, but you would lose your deposit if you don't close.

01:10:07.000 So your deposit is what's actually at risk.

01:10:10.000 And when the inspection shows up with something that you didn't know was there or it's worse than the other houses in the neighborhood, you can go back and what you're telling the seller is that I will go back out of this deal and you will have to put it back on the market and sell it to somebody else or you can give me this credit and I'll stick with it.

01:10:26.000 Now, you gotta understand the leverage when it comes to buying a house, right?

01:10:30.000 Just like in the dating game, there's leverage that each side has, and if you understand that, you know when you can push it and when you don't have things on your side.

01:10:36.000 When a seller first puts their house on the market, they have all the leverage.

01:10:39.000 It shows up in everyone's inbox.

01:10:41.000 It's all over Zillow.

01:10:42.000 The realtor's getting tons of calls.

01:10:44.000 They're trying to create a bidding war.

01:10:46.000 That is the young woman, 18 years old to 23.

01:10:49.000 Everybody wants it, right?

01:10:51.000 You have to give more, a bigger effort if you want to get after that, okay?

01:10:56.000 Now imagine, I use this analogy like it's a girl that wants to go to prom, right?

01:11:00.000 She's not gonna say yes to a normal person.

01:11:02.000 She's holding out for the high school quarterback when it's like six months away.

01:11:06.000 But now you get to like three days before prom.

01:11:09.000 They're starting to get scared.

01:11:10.000 Am I gonna go at all?

01:11:12.000 You're the chess master.

01:11:14.000 You got a good shot of actually getting a really hot girl to go to prom with you, okay?

01:11:19.000 When you're in escrow on a property, the seller is having the days on market accumulate.

01:11:24.000 All the other competition has moved on.

01:11:25.000 They don't want that thing anymore.

01:11:27.000 They don't even know it's available.

01:11:28.000 It shows pending when people are looking at the house.

01:11:31.000 And if you back out, That seller's in trouble.

01:11:34.000 Because now their house comes back on the market.

01:11:36.000 It's been 40, 50 days since it went on there.

01:11:38.000 It looks like stale product.

01:11:40.000 All the buyers that were initially interested don't see it anymore.

01:11:43.000 The odds of them getting an offer as good as yours goes down.

01:11:46.000 So what you're doing is you're saying, if you don't want to give me this credit, you're going to have to put your house back on the market.

01:11:51.000 And if it's a red-hot market, they don't care.

01:11:53.000 A lot of times they'll have a backup offer too behind you.

01:11:56.000 If they're smart, they will.

01:11:57.000 A good realtor will do.

01:11:58.000 That's what I would do.

01:11:59.000 Say, fine, you can back out of the deal.

01:12:00.000 That's fine.

01:12:01.000 We have another person going to pay more than you.

01:12:03.000 But if they don't, that's when they're more likely to accept your credit you're requesting, and you can go with a higher credit or a price reduction or some combination of the two.

01:12:12.000 And there's nothing wrong with being a backup buyer, guys.

01:12:14.000 I've had it before where they took another offer.

01:12:16.000 I was the backup.

01:12:17.000 That person failed.

01:12:18.000 They couldn't get financing or whatever.

01:12:19.000 They called me back. 0.95

01:12:20.000 Yeah, I fucking still want it. 0.92

01:12:20.000 You still want it? 0.92

01:12:22.000 Boom.

01:12:23.000 We're under contract and I get it.

01:12:24.000 I would argue most people that are in contract, they don't really buy the property.

01:12:28.000 Yeah.

01:12:29.000 Surprisingly.

01:12:29.000 Yeah.

01:12:30.000 The other thing, too, is that you got to know a lot of times if people are buying it as like a home or whatever...

01:12:30.000 Yeah.

01:12:36.000 And they're not an investor, they might not get approved.

01:12:38.000 Their financing might crash or something happens.

01:12:41.000 Three things blow up deals typically.

01:12:42.000 It's going to be the financing falls through, which might not be that you couldn't get the loan, but maybe rates went up from the time you went in there.

01:12:49.000 And you got in at 8%.

01:12:50.000 Now they're at 8.75 and you can't afford the house or you don't want it anymore.

01:12:54.000 You want a cheaper house.

01:12:55.000 The other one would be the appraisal comes in low.

01:12:57.000 So when an appraisal comes in, though, the bank won't lend you as much of the money, so you have to bring more money to make up the difference, and people don't like that.

01:13:03.000 It also makes them feel like they got ripped off.

01:13:06.000 So they'll back out for that reason, which is funny because people in 2015 backed out of deals because the appraisal came in five grand, and now that house is worth like $200,000 more than it was.

01:13:15.000 But that happens.

01:13:15.000 And the other thing is the inspections.

01:13:17.000 It scares the people what shows up when they do the home inspection.

01:13:20.000 Most buyers think that a house is in perfect condition, even if it's 40 years old.

01:13:24.000 Wow.

01:13:24.000 Yep.

01:13:25.000 It's funny because on the show, we have a term for girls. 0.90

01:13:28.000 We call it the whole facts.

01:13:29.000 Make sure that she's verified.

01:13:31.000 Yeah.

01:13:31.000 Just get the health facts, man, basically.

01:13:34.000 Yeah.

01:13:34.000 And the thing, too, I want to say, guys, if you make an offer on a house and it appraises less or there might be some situation with inspection that you don't like or whatever, look long term.

01:13:44.000 Is this house going to more than likely appreciate significantly?

01:13:48.000 Am I going to be able to make up some of this money on rent, etc.?

01:13:51.000 Think long term, and a lot of the times you're going to realize that, okay, I'm paying $5K over asking, or the appraisal came back $10,000.

01:13:58.000 I offered $100,000, the house came back appraised at $90K. Yo, is that 10k difference that much really?

01:14:06.000 Not really.

01:14:06.000 You know what I mean?

01:14:07.000 Because remember, you're going to have to come to the table with more money to make up the difference because the bank is only going to give you 75 to 80%.

01:14:13.000 But long term, in a year, two years, three years, if it's a hot market, yo, you're going to make that money back in appreciation easy.

01:14:22.000 Yeah.

01:14:22.000 Yeah, so you can request them to drop the price of the appraised value.

01:14:25.000 Yeah.

01:14:25.000 And they have the choice to either give it to you, not give it to you.

01:14:27.000 What usually happens is you meet somewhere in the middle.

01:14:29.000 Yeah.

01:14:29.000 But it doesn't hurt your request unless there's a backup offer and you can't make any mistake at all because someone else is going to swoop in there.

01:14:35.000 Exactly.

01:14:36.000 Which you should assume if you're in a hot market and you make an offer and it gets accepted and there were a bunch of other people, guaranteed there's going to be a backup offer.

01:14:36.000 They're going to take it from you.

01:14:44.000 So it might be worth it to just eat the bullet of the temporary shortage.

01:14:49.000 Okay, so...

01:14:50.000 Somebody asked in the chats, they said, why don't they just give us the inspections before we write the offer? 1.00

01:14:55.000 And the reason is that the sellers are stupid. 1.00

01:14:58.000 They should do that. 1.00

01:14:59.000 That's what I do.

01:14:59.000 If you're going to have me sell one of your houses, I'm going to say, Myron, you might not like this, but you're going to pay $500 to get a home inspection on this house, especially if we're in a hot market.

01:15:08.000 And it's going to cost you $500, but you're going to pay to have the inspection, and then we're going to give that to the buyers before they write their offer.

01:15:14.000 Now what they're going to try to do is they're going to say, oh, look at all the problems with the roof or whatever.

01:15:18.000 I'm going to write a lower offer.

01:15:20.000 But if this is a hot market, I'm getting a bunch of offers from other people.

01:15:24.000 And I'm going to come back to them and say, hey, you can ride it like that if you want, but just so you know, these four other people are paying a lot more than you.

01:15:29.000 So they're going to have to pay.

01:15:31.000 They're going to have to be the top offer.

01:15:32.000 It doesn't matter.

01:15:33.000 And then I'm going to come back to them and I'm going to say, by the way, you're going to need to waive your inspection contingency because I've already given you all the inspections.

01:15:38.000 There's nothing more to see.

01:15:40.000 I now saved you $10,000 to $20,000 in credits that they probably would have requested during the escrow period because they had to pay for their own inspections.

01:15:48.000 So for that $500, you've saved yourself thousands of dollars in credits that you probably would have had to give once they got the inspection report.

01:15:55.000 You've also saved yourself the chance of them backing out of the deal because of what they saw in putting your house back on the market.

01:16:00.000 If you're selling, it is way smarter to take that approach.

01:16:03.000 To have an inspection report ready.

01:16:04.000 And agents don't do that.

01:16:06.000 No one ever talks about what I'm describing.

01:16:08.000 In fact, I take that same principle and I apply it to the other things that cause houses to fall out of contract.

01:16:13.000 So the other thing that could blow up our deal is if the appraisal comes in low.

01:16:16.000 So before I accept that offer, I'm going to go back to that agent and say, hey, if the house appraises low, I need you to write into your offer that you agree to pay $10,000 over the appraised price.

01:16:25.000 You don't want to do that?

01:16:26.000 Fine, somebody else will.

01:16:27.000 Because that's when we have the leverage.

01:16:29.000 And I'm also going to say, hey, your lender, just so you know, I don't know this lender. 1.00

01:16:33.000 I don't know if they're full of shit or not. 0.98

01:16:34.000 We're going to have them get approved with my company so that my team can take a look at the person who's saying to buy their house and we can see what's their debt to income, what's their credit score. 1.00

01:16:43.000 Are they actually full of it or is this deal going to close?

01:16:45.000 I've now removed the majority of the reasons that this house would fall out of contract and your chances of closing have gone way up because we prepped it ahead of time.

01:16:54.000 Less than 1% of agents will even think about doing something like that.

01:16:57.000 Yeah, I was going to say, I've never heard of a seller having an inspection report ready to give to you.

01:17:01.000 I do that 100% of the listings that I take, I tell them, this is what you're going to do, and it's going to save you tens of thousands of dollars.

01:17:07.000 Because that's when the buyer has all the leverage, is when that inspection report comes back, and they're like, hey, you're going to give me the credit, or I'm going to back out.

01:17:13.000 I don't want to put my client in the position where they can even do that.

01:17:16.000 Yeah.

01:17:17.000 Are you running the appraisal as well?

01:17:19.000 You can't run an appraisal because the lender has to order the appraisal.

01:17:21.000 Yeah, I was going to say, yeah, the lender for the buyer has to run it.

01:17:23.000 Correct.

01:17:23.000 But what I do is I have them agree that they're going to pay X amount over a low appraisal price.

01:17:28.000 So they can't come back and back out of the deal.

01:17:28.000 Okay.

01:17:30.000 They can't come say, hey, to appraise low, drop the price.

01:17:33.000 I'm like, nope, you already agreed.

01:17:35.000 We'll drop it to the appraisal price and add 10K or add 20K. You agreed to that in the beginning.

01:17:39.000 That's actually a good thing.

01:17:40.000 So I've done this before, too, where I've written contracts up where if it's a really hot market and it might not appraise, what I'll do is, and I really want the house, I'll say, look, I'll cover up to $10k difference.

01:17:52.000 There you go.

01:17:53.000 You know what I mean?

01:17:53.000 That's how you get your offer accepted.

01:17:54.000 Yeah, that's a good way to be competitive, guys, in a hot market is you offer.

01:17:58.000 If it doesn't appraise, I'll pay up to $5,000, $10,000 above asking with my, you know, With extra funds or whatever it may be, because that will make you a better potential buyer as well.

01:18:11.000 Yeah, you've got to stand out from all that.

01:18:12.000 You're competing against the 10 other people that want that property when it's a hot market.

01:18:15.000 Just don't apply what we're seeing right here to a slow market.

01:18:19.000 You don't have to be aggressive if not as many other people want that asset.

01:18:22.000 Yeah, if it's a slower market, then you can start being a bit more frugal and stuff like that.

01:18:27.000 But in a hot market, you can't afford to do that, because you're going to lose your house every single time to someone that's going to...

01:18:32.000 It's amazing to me how many cash buyers there are.

01:18:33.000 That's the thing that would be killing me a lot of times.

01:18:35.000 Cash buyers will come in and be like, I'm buying a cash, blah, blah, blah.

01:18:38.000 And they'll make a cash offer above asking.

01:18:40.000 Bro, it's the Canadians, it's the Russians, the Black Rocks. 1.00

01:18:44.000 Think about the guys that are good with women get more than women, right? 0.88

01:18:48.000 The guys that are good with money have more of the money.

01:18:50.000 Yep, exactly.

01:18:52.000 The people that are listening that are not good with money, they can't understand how it works.

01:18:56.000 But it's not luck that you end up getting wealthy.

01:18:58.000 You follow principles that wealthy people follow.

01:19:01.000 You end up with more money.

01:19:02.000 You've got to find somewhere to put it, right?

01:19:04.000 Just like it's not luck that certain guys are better with women.

01:19:06.000 It's not luck that certain guys are better in the gym.

01:19:08.000 There's principles that people follow.

01:19:11.000 And so there's a lot of cash buyers out there because there's a lot of people that have been sitting on a lot of cash that are good at making money.

01:19:16.000 Where else are you going to put it right now?

01:19:19.000 Bonds are less than inflation.

01:19:21.000 Stock market is super inflated.

01:19:22.000 Even though interest rates are high, real estate is still the cleanest shirt in the dirty laundry.

01:19:26.000 Absolutely.

01:19:27.000 And not only that, inflation is good for real estate.

01:19:30.000 Huge.

01:19:30.000 Because what it basically does is, as the dollar gets weaker and weaker and weaker, Well, guess what?

01:19:36.000 That loan that you secured on that house, etc., that amount of money that you owe becomes less and less.

01:19:42.000 Yes, that's exactly right.

01:19:43.000 You're paying your loan back with dollars that are worth less than they were when you took out the debt.

01:19:47.000 And at the same time that's happening, rents go up because of inflation.

01:19:51.000 I wasn't a genius because the rents were 800 and now they're 2150.

01:19:55.000 That's just what inflation did because our government printed a lot of money.

01:19:58.000 So the way I look at it, if you are not investing into something like real estate, you're losing money every single day because inflation is eating it up.

01:20:05.000 Real estate is one of the best asset classes to combat inflation by far.

01:20:09.000 Actually, inflation works in your favor as a real estate investor.

01:20:11.000 Yeah.

01:20:12.000 That's really the reason we do it.

01:20:13.000 And most millionaires have it as a part of their portfolio.

01:20:14.000 Yeah.

01:20:15.000 It's how they made their first million.

01:20:16.000 Yeah.

01:20:17.000 Okay, so what I can do is I can read some chats because we're up to step seven now. 0.96

01:20:23.000 And guys, like the goddamn video because we've been giving y'all nonstop fire this past like 40 minutes or so on real estate. 0.75

01:20:30.000 We have a special guest on the podcast with the girls after too as well. 0.99

01:20:33.000 Yeah, so cool.

01:20:35.000 What do we got here?

01:20:36.000 And we're reading 20 and up guys just to make sure that we keep the show high and tight.

01:20:40.000 Thanks, you guys, for everything.

01:20:41.000 I'm 19 years old, making 10K profit per month with Amazon FBA credit score 730.

01:20:44.000 Quick question.

01:20:45.000 I want to start my real estate portfolio early at this age.

01:20:47.000 Will taking FHA loan route be the best option for my situation?

01:20:51.000 I would say yes.

01:20:53.000 To get your first house is a fantastic way to begin.

01:20:55.000 Pam DSLR goes, said I can't apply this here in Europe, Netherlands.

01:20:59.000 Don't use credit scores and FHA loans, etc.

01:21:01.000 Don't exist here.

01:21:02.000 Also, one small family house here is $350,000 plus. 0.99

01:21:05.000 Damn. 0.98

01:21:06.000 People take for granted that you can get 5% down, 3.5%, even 20% down is an American thing. 0.99

01:21:12.000 You go to other countries, you go to like Egypt, they'll give you 50% down for three years and then you gotta pay the whole thing back.

01:21:18.000 It is very hard to finance real estate in other countries.

01:21:20.000 Especially in Muslim countries, they don't operate on interest. 1.00

01:21:22.000 That's true.

01:21:23.000 Chief goes...

01:21:43.000 Good afternoon, fresh and fit.

01:21:44.000 Been watching for years now.

01:21:45.000 I live in Montreal, work in cold call sales for five months, and want to get into real estate, but I live in the highest tax province in Canada at 15% thoughts.

01:21:53.000 Give them BBLs hell fresh. 1.00

01:21:56.000 Much love.

01:21:57.000 Yeah.

01:21:58.000 Dude, Canada, from what I've seen, Canada is not a good real estate market, man.

01:22:03.000 I mean, if you can, try to see if you can invest in the States.

01:22:06.000 Canada?

01:22:07.000 Yeah.

01:22:08.000 Bruh.

01:22:09.000 Canada don't.

01:22:10.000 Canada don't.

01:22:14.000 Oh, man.

01:22:17.000 B-Novo goes 50 bucks.

01:22:18.000 I inherited a paid-off home.

01:22:20.000 I definitely plan to rent it out, but I don't know much about Real Estate Game.

01:22:23.000 If you were me, what steps would you take?

01:22:25.000 Love the show.

01:22:27.000 Okay, if you inherited the home and you live in it... 1.00

01:22:30.000 I'll put a HELOC on that bitch. 1.00

01:22:32.000 Aka, what a HELOC is, guys, is a home equity line of credit, which basically you turn your house to equity in your home. 0.99

01:22:38.000 Let's say the house, again, easy numbers because I'm bad at math.

01:22:40.000 Let's say the home is worth $100,000, right?

01:22:43.000 And you open up a home equity line of credit on that house.

01:22:46.000 You can basically get a credit on the equity of the home up to 70% to 80% of the house open to you.

01:22:51.000 So you'll have $80,000, $70,000 to $80,000 available to you that you can use to invest.

01:22:56.000 Assuming you Assuming you don't have a loan on the house.

01:22:58.000 Yeah, he's saying he inherited a paid off.

01:22:58.000 Assuming you don't.

01:23:00.000 It's paid off.

01:23:01.000 Yeah.

01:23:01.000 So if you live in it, you could do a HELOC. Now, can you do a HELOC on a house that you don't live in?

01:23:06.000 You can, but not many banks are going to take that on because that's riskier.

01:23:09.000 Dave described this earlier.

01:23:11.000 When you live in a house, banks favor that because they more than likely are going to take care of the home.

01:23:15.000 It's less risk, et cetera, when you live in it.

01:23:17.000 If you're an investor and you do a HELOC on an investment property, it's a bit harder.

01:23:21.000 The terms are harder.

01:23:22.000 And there's only a few banks that do it.

01:23:24.000 But if you live in it, it's very easy to get a home equity line of credit.

01:23:27.000 And I would say, a lot of the times, a home equity line of credit is better than a cash-out refinance because that money is available to you at all times.

01:23:34.000 And you can basically use it to pull that money out, buy a house, and then you can go ahead and replenish those funds later on so you don't pay too much in interest.

01:23:42.000 That is a good comparison.

01:23:43.000 Do you do a cash out refinance or do you do a HELOC? The upside to a HELOC is that there won't be closing costs to it.

01:23:50.000 Cash out refinance could be anywhere between $5,000 to $15,000.

01:23:52.000 You close the HELOC and then after that it's open to you.

01:23:54.000 And it's only like $500 to open one.

01:23:56.000 It's very cheap.

01:23:57.000 The downside to a HELOC is that if you do pull the money out, the rate floats.

01:24:02.000 Most of the time.

01:24:03.000 So if you get like 3-1 arms, 5-1 arms with HELOCs, that's better.

01:24:03.000 Yes.

01:24:08.000 But usually if the rates go up, so does your payment.

01:24:10.000 The cash out refi, you know you're locking in a lower rate.

01:24:13.000 So that's really like the balance that you've got to weigh is if I'm going to use the money or not.

01:24:18.000 HELOCs are best used for short-term purposes. 0.99

01:24:21.000 You're going to get that money, you're going to use it to improve a property, then you're going to refinance it out and go put it somewhere else, or you're going to flip a house, you're going to pay off some debt, and then save it back up.

01:24:29.000 They're not a great strategy for, let me pull 200 grand out of a house on a HELOC, and then go buy more real estate with that money.

01:24:35.000 Because if rates go up to 12, 13, 14 percent, your HELOC's going up.

01:24:39.000 Yeah, that 200k you took out, now you're paying a higher interest.

01:24:41.000 And who would have thought we'd be sitting at, what did you get, 8.8 percent?

01:24:45.000 Yeah, who would have thought that a couple years ago when they were at three and a half?

01:24:47.000 Yeah, dude.

01:24:48.000 Yeah.

01:24:49.000 Yeah, it sucks, but like I said before, it's better that I invest that money, get that property, right, cash flow, with a high interest rate, with the tax purposes, et cetera, versus letting it just sit in a market and get eaten by inflation anyway.

01:25:03.000 So, but yeah, a HELOC, I would say, in most situations, I think a HELOC is better, but HELOCs are harder to get than a cash or refinance, especially if it's an investment property.

01:25:11.000 We have them on investment properties at the one brokerage, but the rates are not fun.

01:25:15.000 Yeah.

01:25:15.000 They're like probably 11, 12% right now.

01:25:17.000 Jeez!

01:25:18.000 But does that interest rate kick in once you pull the money out?

01:25:21.000 Yeah.

01:25:21.000 Okay.

01:25:22.000 You don't pay anything to open it.

01:25:23.000 It's just like a credit card.

01:25:24.000 You have a line of credit.

01:25:25.000 You don't get interest on it until you pull the money out.

01:25:27.000 Until you actually pull the money out.

01:25:28.000 But it is good where you have that money available to you and you can use it anytime.

01:25:32.000 That could have saved you if you didn't have that loan that you looked out for and you had to get some money to pay for that air conditioner that broke or whatever the issues were.

01:25:40.000 It's a great lifeline to have that you could go pull some money out of a HELOC. Even if rates are high, if you're pulling out $10,000, $12,000, that's not going to kill somebody.

01:25:47.000 You can go pick up a shift waiting tables and make that money back.

01:25:50.000 Yeah, and you can replenish it.

01:25:51.000 Versus the cash out of refi, it takes, what, 30 days to close or whatever, but you get that money out and you're able to use it as well.

01:25:57.000 So think of the HELOC, guys, as a gun that's always loaded, ready to be used, but you've got to pay if you use that gun, versus a gun that has one bullet that you're getting one time.

01:26:06.000 You know, so it is what it is.

01:26:08.000 Let's see here.

01:26:09.000 What else do we got here?

01:26:11.000 Oh, what do you...

01:26:12.000 Y'all the goats.

01:26:13.000 I will have $30K saved at the end of December this year.

01:26:15.000 Credit score, $730.

01:26:17.000 I live in Los Angeles, but can't relocate because my pay will drop due to my job.

01:26:21.000 I want a fourplex to FHA it. 0.59

01:26:23.000 What should I do?

01:26:24.000 I make $5K a month and save $3K monthly.

01:26:27.000 Yeah, dude, you're going to need way more money if you want to buy in Los Angeles.

01:26:30.000 Yeah.

01:26:31.000 You're going to need way more.

01:26:33.000 You're going to need...

01:26:34.000 California.

01:26:35.000 Yeah, you're going to need like 200K. I mean, if they're making 5K but saving 3,000 of it, they're doing well living beneath their means.

01:26:42.000 I would say, pick up another...

01:26:44.000 You need to make more money, bro.

01:26:45.000 You pick up another job or do something else to earn some extra income.

01:26:49.000 While simultaneously, I would look at better markets.

01:26:51.000 I would look at Las Vegas.

01:26:52.000 All you guys in Los Angeles, look at Las Vegas, bro.

01:26:56.000 You can even drive there.

01:26:57.000 Yeah, it's a three-hour drive.

01:26:59.000 You can go ahead and look at the property there.

01:27:00.000 It's exploding in growth.

01:27:03.000 They just got a football team put over there.

01:27:05.000 They're trying to shift from just a tourist city to a more residential area.

01:27:08.000 The houses are better priced.

01:27:09.000 I think Vegas is a great upside market. 0.99

01:27:12.000 Shit, we're going to be there on Wednesday. 0.99

01:27:13.000 Nevada's cheaper than L.A. Yeah, we're going to be there. 0.99

01:27:16.000 She doesn't go to Power Slap. 1.00

01:27:16.000 Chelsea Rumble. 1.00

01:27:17.000 You seen that?

01:27:18.000 No, but I get told I look like Dana White.

01:27:21.000 That's what celebrity look like, yeah.

01:27:24.000 It's funny.

01:27:25.000 So, yeah, man, definitely, guys, if you're in LA, man, I would look at a better market.

01:27:29.000 But he's saying that he can't move somewhere else because he would take a decrease in pay.

01:27:32.000 So that would be what I'd look at.

01:27:33.000 Like, well, if I move to Las Vegas, could I make the same money, or would it be a significant drop-off?

01:27:38.000 He probably won't make the same amount of money.

01:27:40.000 Yeah, that's the hard thing.

01:27:41.000 Housing is the most expensive where you make the most money.

01:27:44.000 Where was that question again, Bills?

01:27:47.000 The one right at the top.

01:27:49.000 Yeah, scroll up a bit.

01:27:51.000 Yeah.

01:27:52.000 Yeah, he wants to FHA it too, so he's got to live in it. 1.00

01:27:56.000 Damn. 0.99

01:27:57.000 Yeah, bro, that's a tough situation. 0.99

01:27:59.000 If you're going to have to stay in LA, you need more money, dude.

01:28:01.000 30K is not going to get you anything.

01:28:02.000 Buy pillars and learn how to make more money.

01:28:04.000 It can happen.

01:28:06.000 Hey guys, I'm in New Jersey and want to buy a 2-3 family house.

01:28:09.000 My mom is wanting to take a HELOC against her home for the house. 1.00

01:28:12.000 Should I refi a home to pay back HELOC or only refi to buy a second property and use the profit from the rent to pay back HELOC? Good question.

01:28:17.000 What do you think, Dave?

01:28:19.000 I'm reading the question here.

01:28:20.000 Should I refi the home to pay back the HELOC or only refi to buy a second property and use the profit from the rent?

01:28:26.000 If you can find a second property that's going to cash flow positively, you can get a good deal on, you're better off doing that.

01:28:30.000 But in today's market, it becomes very, very hard to find more property, so it wouldn't be the end of the world to refinance the money, pay off the HELOC, and like you said, Myron, you still have it available if that other property comes.

01:28:42.000 Correct.

01:28:42.000 You replenish it, yeah.

01:28:43.000 Especially with the way HELOCs are now, I guarantee the interest rates are above 10% with the HELOC, so yeah, it might be better to pay off that HELOC and have it available.

01:28:50.000 That's exactly right, yeah.

01:28:52.000 We got here.

01:28:53.000 What do you do to set up the contracts for your tenant?

01:28:55.000 Did you get a lawyer to write it up yourself?

01:28:58.000 Also, the bonus episodes are fire.

01:29:00.000 You should call the unfiltered, uncensored, off the rails since the shows go all over the place.

01:29:03.000 Keep up the good work.

01:29:05.000 So my real estate agent is very good, so he writes it up, but we do get it reviewed by a lawyer.

01:29:10.000 But that's up to you, how nuanced you want to get with it.

01:29:14.000 Just want to drop by to thank you guys for everything you do.

01:29:16.000 Went from making 70K with zero credit history to now, first time making well over 100K in credit up in the 730s.

01:29:21.000 Keep it to go work, man.

01:29:22.000 That's what we're talking about, Gene.

01:29:22.000 Good stuff, man.

01:29:23.000 We're adding that value, bro.

01:29:25.000 I fell in a river when I was 19 and almost froze to death.

01:29:27.000 They sent me an ambulance bill the next week for $1,100.

01:29:31.000 I was blacked out, and I don't recall being in an ambulance, so I threw the bill away.

01:29:34.000 To this day, it never showed up on a credit report.

01:29:35.000 All right, you got lucky, my friend.

01:29:36.000 Bro.

01:29:38.000 You're lucky as hell, bro.

01:29:41.000 Yo, them ambulances don't play, man. 0.57

01:29:43.000 Hey boys, I'm from a pretty wealthy family, top 5% income, but we're Muslim and interest is prohibited, meaning no loans and any property has to be bought all cash.

01:29:50.000 With that in mind, is real estate a good investment since only upside is appreciation?

01:29:55.000 Yes, because you can still go ahead and write off depreciation and cost segregation on your taxes, so it's still a good asset class.

01:30:03.000 Education.

01:30:04.000 My wife is getting $250,000 as a personal loan at 1% interest from her work.

01:30:08.000 She's a doctor, but she has to work there for five years. 0.99

01:30:11.000 Will it be worth to buy a home and rent it out?

01:30:15.000 1% interest from her house?

01:30:18.000 Oh, no.

01:30:19.000 Doctors have special loans.

01:30:21.000 From her work.

01:30:21.000 Okay.

01:30:22.000 So she's going to get $250,000 personal loan at 1% interest rate, but she has to work there for five years. 0.99

01:30:27.000 Will it be worth to buy a home and rent it out?

01:30:29.000 Yeah, dude.

01:30:30.000 I mean...

01:30:32.000 If she enjoys the job and she gets paid a good amount...

01:30:35.000 She's going to be there anyway.

01:30:36.000 She's going to be there anyway, more than likely, and they're able to give her a loan at 1% interest?

01:30:41.000 $250k?

01:30:41.000 Bro, that's a steal, kind of.

01:30:43.000 Yeah, it's huge.

01:30:44.000 But she's agreeing that she has to work at the hospital or whatever for five years.

01:30:47.000 She can't leave.

01:30:47.000 Yeah, she can't leave.

01:30:48.000 But I would say if she doesn't mind the hospital, bro, fucking take it. 0.99

01:30:51.000 Wait, what if they fire her? 0.99

01:30:52.000 She already got a loan. 0.90

01:30:53.000 You gotta look at those.

01:30:53.000 Or what if she dies or something terrible happens?

01:30:55.000 Does that mean that the loan has to be paid back immediately?

01:30:58.000 Yeah, I would look at the terms.

01:30:59.000 But if it's her being there for five years and she doesn't mind the hospital, bro, that's a fantastic deal.

01:31:05.000 1% interest rate?

01:31:06.000 That's free money!

01:31:06.000 Wait, wait, hold on.

01:31:07.000 She's telling me, as a doctor, she could work there for five years.

01:31:10.000 What if she gets fired? 0.95

01:31:12.000 She already got the loan. 0.97

01:31:13.000 Does it matter?

01:31:13.000 No, she's got to complete the five years, probably.

01:31:15.000 She's agreeing to work there for five years to get the loan, but he's saying, what if she doesn't make the whole five years?

01:31:19.000 Yeah.

01:31:20.000 You've got to look at the terms.

01:31:21.000 And he says, you know what?

01:31:22.000 I'm going to get fired.

01:31:23.000 Gets fired.

01:31:24.000 Keeps the property.

01:31:24.000 There's probably something where they can go after her and get that money back.

01:31:28.000 They've got to read the terms.

01:31:29.000 Yeah.

01:31:30.000 I guarantee it's either she gets the $250,000 at the end of the five-year term, or maybe she gets a portion of it up front. 0.86

01:31:35.000 Got it.

01:31:36.000 And then a second portion, or maybe in the middle.

01:31:38.000 But I guarantee there's a clause in there where they say, if you don't fulfill obligations, we reserve the right to come after you for XYZ. Garnish your bank account, whatever it is.

01:31:46.000 So look into that, bro.

01:31:47.000 But on paper, assuming she's gonna be there for five years, doesn't sound bad to me. 0.98

01:31:51.000 1% interest rate is fucking crazy, bro. 0.98

01:31:53.000 Might as well. 0.99

01:31:54.000 That's free money.

01:31:55.000 Wow, fresh to fit and bigger pockets, my life is complete.

01:31:57.000 Thank you all so much, David.

01:31:58.000 I'm looking forward to becoming an amazing real estate agent.

01:32:00.000 Any advice to begin as an agent?

01:32:01.000 How did you start working with a brokerage?

01:32:04.000 Yeah, that's a good question.

01:32:05.000 I wrote three books for real estate agents.

01:32:07.000 Sold, Skill, and Scale.

01:32:08.000 So I'd start off by ordering those books because there's a lot of information that no one else is going to tell you.

01:32:13.000 It's very hard to find a mentor in this space.

01:32:15.000 And don't fall for brokerages that pursue you and make you feel like you're special.

01:32:20.000 It's like, I don't know, another analogy here.

01:32:22.000 Going to a club and having a guy talk to you.

01:32:23.000 That is every single person's experience everywhere.

01:32:25.000 It doesn't mean you're special.

01:32:27.000 Brokers are going to be hunting you down and making it sound like, I'm willing to give you a job offer.

01:32:32.000 They're all headhunters.

01:32:33.000 They're body shops.

01:32:34.000 Brokers want to get as many agents as they can in the door.

01:32:37.000 So I tell people to look for a brokerage that has someone that is going to take you under their wing and mentor you.

01:32:41.000 Worry about that way more than your splits.

01:32:44.000 Worry about that way more than the fees.

01:32:45.000 It's much more important that you find someone that's going to show you the ropes.

01:32:48.000 Very hard to find in this space.

01:32:49.000 Fair enough.

01:32:51.000 Hey, FNF, hypothetically, my friend owns four properties and has been inputting wrong information on taxes for those properties.

01:32:59.000 What is my next move to legitimize their real estate business?

01:33:03.000 Oh, man.

01:33:04.000 Bro, you run, bro.

01:33:06.000 Run the other way. 1.00

01:33:06.000 What the fuck are you doing, man? 1.00

01:33:09.000 Yo, man. 1.00

01:33:10.000 He fucked up, man. 1.00

01:33:11.000 What the hell are you doing, bro? 1.00

01:33:12.000 If he's doing some dumb shit like that, like, hell nah, man. 1.00

01:33:14.000 I mean, you can see... 1.00

01:33:15.000 Get out of there.

01:33:16.000 DJ Envy right now.

01:33:16.000 Get out of there, man.

01:33:17.000 Run, bro.

01:33:18.000 Hey, Minor Fresh.

01:33:18.000 I'm high school 17.

01:33:19.000 I'm working 55 hours a week and going to school at the same time.

01:33:21.000 How do I juggle school, work, starting a business, fitness, and sleep?

01:33:24.000 For reference, 290 pounds at 5'10". 1.00

01:33:26.000 Number one, you're fat as fuck, so you gotta lose weight. 1.00

01:33:29.000 Number two... 1.00

01:33:31.000 I mean, bro, just keep grinding.

01:33:33.000 I mean, you're young. 0.97

01:33:34.000 You got the time to make this shit happen, but it just comes down a lot of the times to time management skills. 0.96

01:33:39.000 Maybe if you're working that much, it might be in your best interest to work out in the morning first thing before you even go to work because you might be too tired after working a shift. 0.98

01:33:48.000 So rearranging things around can be a huge benefit to you, man.

01:33:53.000 But yeah, priority number one, you need to lose weight, bro. 1.00

01:33:56.000 5'10", 290", you're fat as fuck. 1.00

01:33:59.000 You're huge. 0.99

01:34:02.000 Fedge goes, sup guys, I don't know if you remember, I'm the guy that got hired by Jay Waller about 10 days ago, got some good news, and just seven days of work, already got promoted, wanted to tell y'all, let y'all know it's going good, and I wanted to see if you may need an SFC editor, I don't know what SFC stands for, but, oh, short form content editor.

01:34:18.000 No, we're good, man, but thank you so much, and I'm glad you're doing well with Waller, man.

01:34:21.000 Shout out to Justin.

01:34:22.000 I might need one, though, if you know anybody else over there.

01:34:24.000 Actually, yes!

01:34:25.000 Yo, how should he contact you?

01:34:28.000 Instagram.

01:34:29.000 DavidGreen24 is my Instagram.

01:34:30.000 DavidGreen24, brother.

01:34:31.000 Hit him up on there.

01:34:32.000 Or Justin has my number.

01:34:33.000 He could have Justin reach out to me, too.

01:34:34.000 There you go.

01:34:34.000 Make sure Justin knows what's going on here.

01:34:36.000 Yeah, because we were literally just discussing that.

01:34:37.000 So, yes, dude.

01:34:38.000 Hit up Dave.

01:34:39.000 Hit up Dave, like, right now.

01:34:40.000 All right?

01:34:42.000 Jakarde donated $20.

01:34:43.000 Goes, I'm 29.

01:34:44.000 No girls or kids.

01:34:46.000 Making $200,000 a year.

01:34:47.000 Only monthly payment is $1.8K mortgage.

01:34:49.000 My house is estimated on Zillow for $330,000.

01:34:52.000 I owe $190,000.

01:34:53.000 Should I do a HELOC or save?

01:34:55.000 How much do you recommend?

01:34:57.000 Why would you not do both?

01:34:59.000 Should I work out or diet?

01:35:01.000 Yeah.

01:35:01.000 Do both, dude.

01:35:02.000 Open up the HELOC so it's available to you and also simultaneously save so you don't have to use as much from your HELOC when you eventually do take money out of it.

01:35:10.000 I bought two properties in Canada totaling $1.9 million.

01:35:12.000 I put 20% down and payment was $7,500 Canadian a month.

01:35:18.000 Now interest hikes of me paying $13,000 Canadian and I only received $9,500 in rental income.

01:35:22.000 Should I hold and take a monthly loss or sell?

01:35:25.000 Need long-term advice.

01:35:27.000 The only reason I think they should hold is if they make really good money and save a lot.

01:35:32.000 Most likely this is something you need to sell and get into a fixed rate debt so that doesn't keep happening.

01:35:38.000 Especially because there's no reason to think that they're not going to keep raising rates, especially in Canada.

01:35:43.000 That's rough.

01:35:44.000 Why did you not...

01:35:45.000 Guys, okay.

01:35:47.000 Oh my god.

01:35:48.000 Guys, when you go ahead and you do a loan...

01:35:51.000 Bro, just get a fixed rate every single time, guys.

01:35:53.000 Because you can end up in a situation like this where now you're paying way more money because you didn't get a fixed interest rate.

01:36:00.000 You know what it might be?

01:36:01.000 In Canada, I think in Canada you're forced to...

01:36:05.000 My understanding is the majority of loans over there are like a...

01:36:08.000 It's called a balloon payment that's due, where you've got to refinance every three to five years.

01:36:11.000 So the rates adjust...

01:36:14.000 With most of the loans that they have, or you have to refinance them constantly, and so you're forced to refinance them.

01:36:18.000 They don't have a 30-year fix up there?

01:36:19.000 Wow.

01:36:20.000 That's an American thing.

01:36:21.000 A lot of countries don't have it.

01:36:22.000 They could.

01:36:23.000 It's possible, but I think Rich Cooper just put a video out about Canadian real estate, and he's very bearish on it.

01:36:28.000 He doesn't like it.

01:36:29.000 And he mentioned that that's a problem that they have over there, is they're constantly having to refinance, and so when rates go up, you're stuck.

01:36:36.000 Which is what we're going to be seeing in the commercial space here.

01:36:38.000 In Canada, they basically only have arms, which is what we have.

01:36:41.000 It's the equivalent to having an adjustable rate mortgage here in New States where you get a fixed rate for five to ten years and then it could shift to the market.

01:36:47.000 Yes.

01:36:48.000 My understanding is yes.

01:36:49.000 And if it's not only, it's very hard to get the fixed rate loans.

01:36:52.000 Most people don't have them.

01:36:53.000 Australia's like that.

01:36:54.000 Most other countries don't have the lending options we have.

01:36:56.000 We complain a lot in America about a lot of things.

01:36:59.000 So we're blessed then.

01:36:59.000 We're very, very blessed.

01:37:00.000 So in that case, then you might have to take the strategy where I know a couple of real estate investors that do this. 0.86

01:37:05.000 They get arms on their properties, hold it for five to ten years, depending on how long the arm is, and they sell that bitch out once the arm is over. 1.00

01:37:11.000 Which in Arm, guys, is an adjustable rate mortgage.

01:37:13.000 Let's say they're locking it at 5% because that's the market rate for five years.

01:37:16.000 By that fourth year, they're looking to get rid of that house and sell that house and then go ahead and buy another one.

01:37:23.000 There's people that do that too that do it mid to short term depending on how long they're able to lock their adjustable rate mortgage in.

01:37:29.000 Yeah.

01:37:29.000 Don't hang on to that.

01:37:30.000 That could get even worse.

01:37:32.000 Yeah.

01:37:32.000 Come on, Canada.

01:37:33.000 Yeah, bro. 1.00

01:37:34.000 That sucks, man. 1.00

01:37:35.000 If that's true that you've only got arms in Canada, God damn! 1.00

01:37:38.000 Canada don't. 1.00

01:37:39.000 Yeah, Canada don't, man.

01:37:40.000 You might want to, yeah, maybe sell, bro, and look at investing here in the States instead, dude, where you can get like a 30-year fixed or something like that.

01:37:47.000 Myron's got a great agent.

01:37:48.000 Yeah, I do got a good agent.

01:37:50.000 I don't know if you can help foreigners, though. 1.00

01:37:51.000 Yeah.

01:37:52.000 Hit us up at the One Brokers.

01:37:53.000 We have loans for foreigners.

01:37:55.000 Okay, what do we got here?

01:38:01.000 2%.

01:38:16.000 Yeah, he doesn't want to sell because he's got a really good rate.

01:38:19.000 Yeah, he doesn't want to sell.

01:38:20.000 And I don't think he wants to do a HELOC. No, he doesn't want to do a cash out refi because he doesn't use that rate.

01:38:26.000 You have to do a HELOC if you want to keep the rate.

01:38:29.000 He has no choice.

01:38:29.000 But again, he's talking about using the HELOC as the down payment on the fourplex.

01:38:34.000 If he just had cash in the bank, it's hard to find a fourplex that makes sense.

01:38:37.000 Now you've got to find a place that makes sense and pay the extra interest on the HELOC. You're exponentially increasing your risk.

01:38:44.000 When this is happening.

01:38:45.000 So don't feel pressure that you have to go out there and you've got to buy something right now.

01:38:50.000 Like if you get a good deal, yeah, it doesn't matter how much your interest rate is.

01:38:53.000 It matters how good the deal works.

01:38:55.000 But HELOCs used to be a lot easier to make work because properties were better deals.

01:38:59.000 What else do we got here?

01:39:02.000 Hey, watching from Australia, you guys have changed my life and I will be forever grateful for FNF. Question for the guests.

01:39:06.000 My family home is fully paid off and worth $1.4 million.

01:39:09.000 What would you do in this situation?

01:39:10.000 It depends what your goals are.

01:39:12.000 They never tell you that, do they?

01:39:13.000 Yeah, they just ask general questions.

01:39:15.000 Yeah, if you're not super financially savvy, you don't want to go put a mortgage on this house when you're not used to having to pay one, a HELOC would be a good idea if you're financially responsible.

01:39:24.000 Use the gun analogy, right?

01:39:26.000 Yep.

01:39:26.000 Don't give a gun to someone that doesn't know how to handle a firearm.

01:39:29.000 If you don't know how to handle debt, don't get yourself in a position.

01:39:32.000 Oh, big one. 0.99

01:39:33.000 If you guys are going to open up a HELOC, and it's very important that I say this, You better not use that fucking money for vacation. 0.99

01:39:40.000 Oh, yeah. 0.99

01:39:41.000 Cars. 0.99

01:39:42.000 For bitches to go out on a vacation. 1.00

01:39:44.000 Hell no. 1.00

01:39:45.000 If you're going to open up a HELOC, guys, that money is only to procure other assets, nothing else.

01:39:51.000 And you need to understand how to underwrite an asset, which is what we're talking about in today's show.

01:39:55.000 This person sounds like they're not really familiar with real estate, so before you even worry about what to do with the property, spend some time educating yourself, read some books, listen to more real estate podcasts, find out what Myron's buying and go buy what My thing is, I don't even want somebody opening up a HELOC because I'm worried that you might take that money to go buy a boat,

01:40:13.000 to go buy a car.

01:40:13.000 That's what happened in 2005.

01:40:14.000 That's what everybody was doing.

01:40:15.000 Yeah.

01:40:16.000 So don't do that, guys.

01:40:19.000 What else do we got here?

01:40:20.000 I have 293k in equity in my primary residence that I built in 2005 in Northeast Georgia. 0.99

01:40:24.000 Divorce is about to force me to either sell or buy her ass out. 1.00

01:40:27.000 What would be wiser? 0.98

01:40:28.000 Sell the house and take my half and purchase a duplex or HELOC to buy her out and keep the house because I like this house and the location.

01:40:36.000 No way I could replace the house for the same money or interest rate, which is 3.25 fixed rate 769 credit score VHA loan. 0.98

01:40:43.000 Damn. 1.00

01:40:44.000 Don't get married, bro. 1.00

01:40:46.000 Don't get married, dog. 0.98

01:40:47.000 Holy.

01:40:50.000 Okay, so he's saying he likes to buy her out and keep the house.

01:40:53.000 Bro, it really comes...

01:40:53.000 Yeah.

01:40:54.000 It's up to you, man.

01:40:55.000 I mean, the number one thing is as long as you get her out, that's all that matters, bro. 0.99

01:40:59.000 So, I would say objective number one is get her the fuck out of there. 1.00

01:41:02.000 And then you can go ahead and make a decision after that. 0.99

01:41:06.000 But yeah, figure out a way to buy her out and get her out of there. 0.96

01:41:09.000 When you're making the decision, I would ask myself, if I had the same amount of money, would I buy this house right now, or would I buy that duplex?

01:41:18.000 That's the best way to go.

01:41:18.000 That's a good question.

01:41:19.000 I'm sorry, good scenario.

01:41:20.000 Which one's the better investment?

01:41:22.000 Okay.

01:41:23.000 What else do we got here?

01:41:24.000 We got Soma goes, hey guys, I'm about to purchase my first property and use most of my savings, but I have a work trip coming up that's going to bank 15K. Do you still think it's a good idea?

01:41:38.000 Don't bank on money you haven't made yet, man.

01:41:40.000 Don't bank on money you haven't made yet.

01:41:42.000 That will leave you in...

01:41:44.000 Are they saying they're going to spend $15,000 on a work trip?

01:41:47.000 I'm confused.

01:41:48.000 Are they going to make it?

01:41:48.000 He's going to buy his first property.

01:41:49.000 He's going to use most of his savings, but he's saying that he's going to have...

01:41:52.000 He's going to bank $15,000.

01:41:56.000 Again, that $15K isn't guaranteed, and again, if you're going to go ahead and buy a house and use all your savings, you're going to be in the same situation that Fresh described before, where you become house poor.

01:42:06.000 Are you living in this property?

01:42:07.000 Are you going to be getting cash flow?

01:42:08.000 I don't have enough details.

01:42:10.000 But my question is, you're saying you're going to bank $15K, but you can afford a property without $15K, right?

01:42:16.000 So...

01:42:17.000 That's what he's saying.

01:42:18.000 He's saying he could afford it now.

01:42:19.000 He's going to drain out most of his savings, but he's going to have $15,000 coming to him with his work trip.

01:42:22.000 I'm saying don't rely on that work trip too much.

01:42:25.000 You're getting that $15,000.

01:42:28.000 That's a good point.

01:42:28.000 Oh, he's going to make $15,000.

01:42:30.000 He's going to basically drain out his savings, buy his first property, but he's going to make $15,000 from a work trip to replenish.

01:42:36.000 But again, that depends on how much is the house going to cost you, how much are you spending.

01:42:41.000 $15,000 might work for you having in reserves in Kansas, but that might not work for you in New York.

01:42:47.000 Yeah.

01:42:47.000 So it depends.

01:42:48.000 That's tricky.

01:42:50.000 But yeah, man, go ahead.

01:42:51.000 You could take the risk.

01:42:51.000 You're young, probably, more than likely.

01:42:53.000 If you're watching us, go ahead and take the risk.

01:42:55.000 But just understand that you better have some money ready to go or have good credit where, God forbid, something happens, you can go ahead and make an emergency purchase on a house or a fix.

01:43:02.000 What else we got here?

01:43:04.000 And then the last one, we're going to close this thing out.

01:43:05.000 We'll go continue the list.

01:43:07.000 On 28, own my first property.

01:43:08.000 And guys, from this point forward, we're going to go 15 up so I can make sure that we, you know, continue on with the steps.

01:43:13.000 We'll still have a few more.

01:43:14.000 On 28, own my first property for six years.

01:43:15.000 Just had it appraised and have 300K equity.

01:43:17.000 What's the best move to reinvest in real estate for passive income?

01:43:20.000 PS, I'm from Canada.

01:43:21.000 Canada again, bro.

01:43:24.000 Six years.

01:43:25.000 You can open up a HELOC, bro.

01:43:26.000 If you got 300K in equity, you can open up a HELOC. That's what I would do versus a cash I refinance.

01:43:32.000 David, read your book Long Distance Real Estate Investing.

01:43:35.000 I really enjoyed it.

01:43:36.000 But I am a federal employee living in Japan.

01:43:38.000 What would your advice be to real estate investors living overseas?

01:43:40.000 Shout out FNF. Good question.

01:43:42.000 Same process if you live in Japan as if you live here. 1.00

01:43:45.000 You understand the fundamentals.

01:43:46.000 That book explains how to buy real estate in other states.

01:43:49.000 So it's like that's exactly what you need if you're going to buy.

01:43:51.000 Yeah.

01:43:53.000 And I think he wants to buy from Japan to the States, so it just applies, bro.

01:43:58.000 David, read that one.

01:44:00.000 Man of Stripe goes, which is better, have a loan on one house and spend your money to buy another house, or just pay off your house and why?

01:44:06.000 That's actually a pretty good one.

01:44:07.000 This is a controversial take here.

01:44:09.000 I know Dave Ramsey is going to tell you pay off the house and have no debt.

01:44:12.000 Other people that are a bit more savvy with the real estate are going to tell you spread that money out across multiple houses so that you can go ahead and control multiple assets that appreciate while getting tax benefits.

01:44:21.000 I would say put down the minimum required to control the asset to a varying degree.

01:44:27.000 I agree.

01:44:28.000 What do you think, Dave?

01:44:30.000 If you're playing defense, paying off your asset is safer, but you're not going to make money doing that.

01:44:37.000 And those opportunities, too.

01:44:38.000 I'd probably agree more with Dave Ramsey's philosophies if we didn't have insane inflation.

01:44:44.000 It just messes everything up, because the people that save with inflation lose.

01:44:48.000 If our government was just printing money everywhere that caused all this inflation, that makes more sense.

01:44:52.000 But when you see how much the value of assets are going up, when you see how much rents are going up, it makes more sense to buy...

01:44:58.000 The real estate, again, that's assuming that that continues, though.

01:45:01.000 We may be heading into a recession right now.

01:45:03.000 It's hard to tell.

01:45:04.000 But if that's the case, you definitely don't want to be taking on a whole bunch of debt that you don't know how to service.

01:45:08.000 Yeah, man.

01:45:10.000 I mean, again, this comes down to your risk tolerance levels, but I would say a healthy medium, though, is putting 20% down as an investor.

01:45:18.000 And saving a whole bunch of money in reserves.

01:45:20.000 Yeah, and saving money because what ends up happening is if you put 20% down as an investor, you have equity in the home, right?

01:45:26.000 You still got to make a monthly payment, but it's not going to be as high.

01:45:29.000 And you control the asset.

01:45:30.000 So that's a happy medium if you don't want to buy houses all the way cash.

01:45:36.000 What else do we got here?

01:45:38.000 Living in Denver, making $125k, living minimally, and just start a house with you.

01:45:41.000 I plan on buying a home, but I want to invest in real estate in Dallas and Miami while living here.

01:45:46.000 What areas do you recommend and how do you go about purchasing while not living in a state you are buying?

01:45:49.000 Miami's competitive, bro.

01:45:51.000 You're going to need at least...

01:45:53.000 $200,000 plus to buy anything in Miami that actually makes sense.

01:45:59.000 Dallas, I don't know the market, but Texas in general is good.

01:46:02.000 You might not be able to buy in the city of Dallas, but you'll probably be able to buy maybe in a Plano or somewhere in the Dallas-Fort Worth area at a good price.

01:46:10.000 But let's continue on with the list here because we've still got a couple things to hit.

01:46:14.000 So we're now at...

01:46:18.000 Sorry, guys.

01:46:19.000 We're now at number seven, I think.

01:46:21.000 Okay, calculate closing costs.

01:46:23.000 This is important, guys.

01:46:25.000 And we figure out, pretty much, we talked about it a little bit earlier, and this is step seven.

01:46:30.000 Closing cost, guys, is the amount of money it's going to cost you to basically close the deal.

01:46:34.000 We would, what, 1% or 2% pretty much of the purchase price, you would say?

01:46:39.000 Closing costs are going to be between 1% and 3% most of the time, but you can get sellers to cover a lot of your closing costs.

01:46:45.000 So one thing that people do if, let's say, we agree on a purchase price of $500,000, is I'll say, I'll give you 510, but you've got to give me a $10,000 closing cost credit.

01:46:53.000 So what that allows me to do, assuming the house appraise, is I can borrow a little bit more money from the bank, but I get $10,000 that I don't have to spend on closing costs that allows me to save more money.

01:47:03.000 Yeah.

01:47:03.000 Yeah, because the bank covers it.

01:47:05.000 They're assuming it appraises.

01:47:07.000 It happens to appraise.

01:47:08.000 Because you guys got to remember that the bank is only going to give you what the house is worth.

01:47:11.000 So let's say the house appraises at, you know, you make an offer for $100,000.

01:47:16.000 Let's say $110,000 you make the offer.

01:47:18.000 But the house only appraises at $100,000.

01:47:20.000 They're only going to give you 70% to 80%.

01:47:23.000 So they're only going to give you between 70% to 80%, which is $70,000 to $80,000.

01:47:27.000 But the house, your contract price is $110,000.

01:47:31.000 So you have to come with more money to the table.

01:47:33.000 But if it appraises...

01:47:35.000 At or above, you can go ahead and say, that's a smart way to do it actually, where if you don't have the capital, you can offset that to the bank instead.

01:47:42.000 That's what you're doing, yeah.

01:47:43.000 Now that made more sense when rates were lower.

01:47:45.000 Yeah.

01:47:46.000 It's a little more expensive to do that now, and I probably wouldn't recommend it if rates get up to 15, 16%.

01:47:51.000 Yeah.

01:47:51.000 But, I mean, even though rates in the eights are not great, they could be worse.

01:47:56.000 Yeah.

01:47:56.000 So that's a creative tip right there to save on closing costs.

01:47:59.000 Because closing costs are typically money that comes out of your pocket to get that house, guys.

01:48:03.000 And sometimes the seller might cover all of it for you, depending on his needs at that point in time.

01:48:08.000 Next, step eight.

01:48:10.000 Renovate, unless it's a turnkey.

01:48:12.000 So, they've talked about this with the ADU, you know, when you guys get the house, right, assuming it's not a turnkey, and turnkey, guys, is when you basically buy a house and it's just like...

01:48:22.000 Ready to go, ready to go.

01:48:23.000 That's what you like.

01:48:24.000 I like turnkeys, personally. 0.97

01:48:25.000 But, you know, a lot of times you gotta come in, you gotta do some shit, paint, whatever it may be, improve some things. 0.94

01:48:30.000 Don't be afraid to renovate, guys, especially if you're a handyman and you're good with your hands or you have a contractor that's always available. 0.85

01:48:36.000 That's a way where you can kind of pay less for a house and then come in, make the fixes, and then increase the value significantly with not that much elbow grease, depending on the market that you're in.

01:48:48.000 What's your thoughts on that, Dave?

01:48:49.000 I try to only buy real estate that needs some kind of renovation.

01:48:53.000 I always want to add value to whatever I'm buying.

01:48:56.000 I'll buy a turnkey if I get a really good price on it or if it's my only option.

01:49:00.000 But in general, I'm looking to buy equity.

01:49:02.000 So I want to pay less than the property's worth if I can.

01:49:04.000 And then I want to force equity.

01:49:05.000 So I want to do something to add value to that property.

01:49:08.000 And then I want to buy in an area where I'm going to get market appreciation equity.

01:49:11.000 So I believe it's going to go up in value.

01:49:13.000 I'm looking to kind of compile a whole bunch of small wins together to make one big win.

01:49:17.000 Bam.

01:49:18.000 All right.

01:49:19.000 And then number nine, rent it out.

01:49:22.000 All right.

01:49:22.000 So you got the house.

01:49:24.000 Everything is good to go.

01:49:25.000 Rent it out.

01:49:25.000 I guess we could talk about tenants.

01:49:27.000 Yeah.

01:49:28.000 How do you go about tenant screening for you, Dave?

01:49:31.000 I don't do that.

01:49:32.000 I let the property managers do it, right?

01:49:33.000 Yeah.

01:49:34.000 It's not a thing I want to mess up.

01:49:35.000 Yeah.

01:49:37.000 Now, if it's your first property, guys, right, because some of y'all might not have a property manager for your first property, here's some rules that you can go by.

01:49:45.000 Try to, obviously, do your background check.

01:49:49.000 Make sure they're not a felon or something like that.

01:49:52.000 $60,000 tends to be the threshold where you're going to have a significantly lower chance of having to evict somebody once they make that much or more.

01:50:05.000 And yeah, man, just interview the tenant.

01:50:07.000 Right?

01:50:08.000 Put the property on, you could put it on a Craigslist, you could put it on the market, whatever it may be.

01:50:12.000 There's different ways to list your occupancy, but this is something that I would outsource as soon as you get a property manager.

01:50:21.000 Like what, after what, one or two properties?

01:50:23.000 I would say at this point you probably want to outsource that?

01:50:25.000 Property management?

01:50:26.000 Yeah.

01:50:27.000 I did it right off the bat.

01:50:29.000 Okay, so you did it at your first house.

01:50:30.000 The first one I ever bought, I messed up so bad, I had to get a property manager to bail me out.

01:50:34.000 Okay.

01:50:34.000 And I just realized a mediocre property manager is still better than me being terrible at it.

01:50:39.000 And I was working in law enforcement, right?

01:50:43.000 So I'm working like six, seven days a week.

01:50:44.000 I'm somewhere else.

01:50:45.000 I want to focus on my career.

01:50:47.000 If you have somebody that's got the time and they're interested in learning it, I think it's a different situation.

01:50:51.000 But I was cutting corners.

01:50:52.000 I was like, alright, we'll just give this guy a shot, not understanding how much of a pain it was.

01:50:57.000 I actually got ripped off by my tenant.

01:50:59.000 Yeah.

01:50:59.000 Yeah, so when I bought that house, it had originally sold for $565,000.

01:51:05.000 I bought it for $195,000.

01:51:07.000 It was after the crash.

01:51:08.000 Yeah.

01:51:08.000 So I got a check back after the escrow to compensate me because I paid too much property taxes.

01:51:14.000 They were based on the original value, and I bought it for like a third of what it used to be worth.

01:51:18.000 Well, the bank sent the check to the property.

01:51:20.000 They didn't send it to me.

01:51:21.000 Even though it was an investment property, the bank just didn't look at that.

01:51:24.000 So he gets a check for like $6,500, forges my signature, pays me the first three months of rent with my own money, and then just stops paying.

01:51:32.000 Right?

01:51:32.000 Wow.

01:51:33.000 And it was like a sob story.

01:51:34.000 It always is.

01:51:35.000 They're gonna give you some, like, oh, poor me, but the mortgage company doesn't care about the tenant sob story.

01:51:39.000 They're gonna keep coming to you.

01:51:40.000 You still gotta keep paying, right?

01:51:41.000 Yep, absolutely.

01:51:42.000 So then you try to get them evicted, and you have to have somebody serve them the paperwork, and they don't answer the door, and they're dodging you, so you have to hire somebody to now go serve the paperwork, and then you have to go through an eviction.

01:51:51.000 It's like six months before the person actually gets out of there.

01:51:54.000 Meanwhile, you're still making mortgage payments, and then I got a judgment against them eventually, but the guy has no money, so there's no way I could get money From the person, long story short, had I just paid 8% to a property manager, I would have saved like $10,000 in the fees of an eviction.

01:52:08.000 Yeah, for me, I did an FHA loan.

01:52:11.000 So I lived in a property, a triplex, and I don't know if this is good because most people can't do this, but I became cool with my tenants.

01:52:19.000 I built a relationship with them back and forth, and I said, you know what?

01:52:24.000 I'm going to be here for you.

01:52:26.000 I want to learn about properties and how to manage, be a landlord.

01:52:29.000 And I stuck it up.

01:52:30.000 All the hardships, calling for issues, they call me.

01:52:33.000 Then I realized, this is a lot of work that I don't want to do.

01:52:35.000 Yeah, yeah.

01:52:36.000 So then I get to somebody else, and it was better.

01:52:38.000 But at the beginning, I want to be hands-on about everything.

01:52:41.000 Yeah.

01:52:42.000 Learn how to do it yourself so you kind of understand what you should be paying, what you shouldn't be paying, what's being overcharged, etc.

01:52:47.000 But I will say that, as a foundation of doing that though, when I raised the rents, you know what?

01:52:52.000 We know why you did it.

01:52:53.000 You painted the property.

01:52:54.000 You gave us hurricane windows.

01:52:55.000 You gave us central AC. You know what?

01:52:58.000 You care about the property helping us become better?

01:53:00.000 No problem.

01:53:01.000 Surprisingly, they stayed.

01:53:01.000 And they stayed.

01:53:03.000 Even though I made $2,000 more after raising the rents.

01:53:06.000 Which is crazy.

01:53:07.000 Yeah, no, that's great.

01:53:09.000 Yeah, I mean, what it really comes down to, guys, is, especially if you have a job, like you were a cop, you were working seven days a week, et cetera, to be able to acquire the capital to purchase homes, Yeah, you might want to outsource it even if it's your first real estate property.

01:53:20.000 There's nothing wrong with taking a grace period maybe six months to a year where you do it yourself and you go through the turmoil and toil.

01:53:27.000 Even me.

01:53:27.000 I love people, bro, but dude, that's annoying, bro.

01:53:29.000 You want to outsource that shit ASAP, bro. 0.99

01:53:31.000 The complaining, stories. 1.00

01:53:32.000 Yeah, and you get people to take advantage of you more.

01:53:34.000 So what I tell most people, if you own the home and you're renting out rooms, you're renting out units in your house, just tell them that you're the property manager.

01:53:41.000 It's better than saying I'm the owner.

01:53:42.000 Yeah, you want a great separation too.

01:53:44.000 You know what I did?

01:53:45.000 So it's funny.

01:53:46.000 I made my realtor the owner.

01:53:48.000 So I was just like the guy that lived on the premises.

01:53:51.000 So they didn't know that I was the owner.

01:53:52.000 That's smarter.

01:53:53.000 But I was their friend.

01:53:54.000 Yo, you got a problem with the sink or with the toilet?

01:53:58.000 I'm calling right now.

01:53:59.000 Don't worry.

01:53:59.000 I got you.

01:54:00.000 I'm calling for you.

01:54:01.000 So it worked out.

01:54:02.000 Okay.

01:54:02.000 But you got to be smart about it, though.

01:54:03.000 Yeah, yeah.

01:54:03.000 You want that degree of separation when you're the owner because you want to maintain that authority to agree and anonymity.

01:54:08.000 All the soft stories like, bro, I can't pay rent.

01:54:10.000 Bro, this happened at work.

01:54:11.000 Listen, man.

01:54:12.000 It's not me.

01:54:13.000 It's the owner.

01:54:13.000 It's very easy to hate on landlords, especially when you assume that they're just rich people with a ton of money.

01:54:18.000 But what people don't understand is that that landlord owes people money in the same way that you owe that landlord money.

01:54:24.000 We still have to pay property taxes.

01:54:26.000 We still have to pay mortgages.

01:54:28.000 When tenants decide not to leave, you have to evict them.

01:54:31.000 One eviction can put you two, three years behind in cash flow.

01:54:34.000 The margins are very thin on most real estate deals.

01:54:37.000 It's not easy to do this.

01:54:39.000 And so when tenants stop paying, then usually the properties are going to end up in foreclosure unless the person has a lot of money saved up. 0.98

01:54:45.000 My tenants are like older men, older women, if they knew I was the landlord, me 23 years old, they'd have been like, what the fuck? 0.98

01:54:52.000 Pay this kid? 1.00

01:54:53.000 I'm going to pay this kid shit. 1.00

01:54:54.000 Oh, the other thing too, I want to tell y'all guys, it's better to rent to families than to single people. 1.00

01:54:59.000 Yes.

01:55:00.000 By far.

01:55:02.000 Also, work in the government.

01:55:04.000 Yeah.

01:55:04.000 You want them to have a stable job.

01:55:06.000 So 60K, families is the best.

01:55:09.000 Something to lose.

01:55:10.000 That's what I always say.

01:55:11.000 You work for the military, and you don't pay your rent, you're going to call their commanding officer and say, that's not a good sign for that person.

01:55:17.000 They have something to lose.

01:55:19.000 I mean, that's a good philosophy in general.

01:55:21.000 Do business with people that have something to lose.

01:55:22.000 There's other stats, too, that I would name, but we're on YouTube, so I can't say it.

01:55:26.000 Don't do it!

01:55:27.000 Alright, I won't say it.

01:55:28.000 Fried chicken?

01:55:28.000 Yeah.

01:55:31.000 Let's move on, bro.

01:55:32.000 Yo, man.

01:55:33.000 Yo, man.

01:55:35.000 All I'm going to say is there's a group of people that have the highest eviction rates.

01:55:42.000 Corner stores?

01:55:43.000 And I'm just going to leave it there.

01:55:44.000 Okay?

01:55:45.000 I'm not going to say no more.

01:55:46.000 Winn-Dixie?

01:55:46.000 Yeah, man.

01:55:47.000 Let's move on, man.

01:55:48.000 We on YouTube, so I'm not even going to say it.

01:55:50.000 Don't worry, man.

01:55:50.000 I got you on the screen, bro.

01:55:51.000 I got you.

01:55:52.000 Hey, hey.

01:55:53.000 Grape juice?

01:55:54.000 Yeah.

01:55:54.000 Anybody?

01:55:55.000 Yeah.

01:55:56.000 So, anyway.

01:55:57.000 Anyway.

01:55:59.000 What's up, David?

01:56:00.000 Wait, wait, bro.

01:56:01.000 No comment.

01:56:02.000 They just so happen to be...

01:56:03.000 Yeah, statistically speaking, this is a fact. 0.99

01:56:05.000 This is not me just talking shit. 0.98

01:56:06.000 I'm just saying, statistically speaking... 0.98

01:56:09.000 Some people tend to have higher eviction rates than others.

01:56:12.000 But again, families, 60K plus per year or more.

01:56:16.000 And yeah, and then do background checks, make sure they're not criminals.

01:56:20.000 I gotta say this, though.

01:56:21.000 Yeah, go ahead. 0.97

01:56:21.000 Shut the Mahitian niggas, man. 0.97

01:56:22.000 They be paying around on time. 0.94

01:56:23.000 Yeah. 1.00

01:56:24.000 My niggas, suck a fat! 1.00

01:56:25.000 Yeah. 1.00

01:56:26.000 Okay, so we're gonna go ahead and recap real quick here, guys.

01:56:29.000 Yeah!

01:56:30.000 And going to the final thing.

01:56:31.000 So today's episode was how to buy real estate step by step.

01:56:34.000 All the steps required to go ahead and get your first real estate property, man.

01:56:38.000 So step zero, improve your credit slash save for a down payment.

01:56:41.000 Step one, get pre-qualified and talk to a lender.

01:56:44.000 Step two, hire a realtor and interview them.

01:56:46.000 Step three, look for a house approximately 20% of your max qualifying number.

01:56:50.000 Step four, underwrite or calculate the cash on cash returns.

01:56:54.000 If it's residential, maybe cap rate if you're doing commercial.

01:57:00.000 Aim for an 8% or better cash-on-cash return.

01:57:04.000 Step five, if numbers make sense, 8% cash-on-cash return or more, make a strong offer.

01:57:09.000 Don't lowball and lose a deal.

01:57:10.000 Step six, do your inspections, and if something returns with the inspection that might be problematic, go ahead and ask for a credit from the seller.

01:57:18.000 It doesn't hurt to ask.

01:57:19.000 Some sellers might tell you no, especially if it's a hot market, but it's worth asking.

01:57:24.000 Step seven, calculate your closing costs, one to three percent.

01:57:26.000 Just after your point, I would say, or tell my realtor, listen, tell them I'm very serious.

01:57:31.000 If this can be done for me, let me know.

01:57:32.000 I'll take it right away.

01:57:33.000 Just something like that.

01:57:34.000 To make it more concrete.

01:57:35.000 With the inspection?

01:57:36.000 Yeah.

01:57:37.000 As in like, for example, you said, if there's something that can be fixed, ask them, but say, hey, I'm very serious about a property.

01:57:42.000 Can this be done for me?

01:57:43.000 I'll take it.

01:57:45.000 Okay.

01:57:45.000 So they know that you're serious.

01:57:46.000 Okay.

01:57:47.000 Yeah.

01:57:48.000 Step seven, calculate closing costs, one to three percent, and it is general ballpark.

01:57:52.000 Step eight, renovate once you get it, unless it's a tourniquet.

01:57:54.000 And even if it's a tourniquet, there's some things you could potentially do to increase.

01:57:57.000 Value ads.

01:57:57.000 Yeah.

01:57:59.000 Step nine, rent it out.

01:58:00.000 We talked about that, right?

01:58:01.000 Obviously, you do your background checks, etc.

01:58:04.000 Try to outsource this to a property manager as soon as you can.

01:58:07.000 That's experience. 1.00

01:58:07.000 Because it's a pain in the ass. 1.00

01:58:08.000 You know what's funny? 1.00

01:58:09.000 If you're the first-time person interviewing tenants, you might fall for their soft stories because you're a human being and you don't want to be a fucking dickhead. 0.99

01:58:18.000 You might not know what to look for. 0.99

01:58:19.000 They're going to finesse you because you don't know what's happening.

01:58:20.000 That's what happened to me.

01:58:21.000 He was way better at being a tenant than I was at being a landlord.

01:58:24.000 Bro.

01:58:25.000 Experience, man.

01:58:26.000 And then step 10, guys.

01:58:27.000 Last one here, okay?

01:58:28.000 Final round.

01:58:30.000 Make the property an LLC and begin the process of protecting your assets and use a quick claim deed to convert the purchase from your personal name over to an LLC. This is very important, guys.

01:58:39.000 A lot of people, right, they'll go ahead and they'll try to buy the house under an LLC. That's okay, but the problem with that is I've noticed and I've done split tests with this.

01:58:47.000 Every lender's different.

01:58:48.000 You get way better terms when you buy it under your personal name than buying it under an LLC. Yeah.

01:58:52.000 You get better interest rates, better terms, etc.

01:58:55.000 So I think the better way to go is acquire the property through your personal name and your personal credit, which is, if you're doing what we're telling you, it's going to be good.

01:59:01.000 Then, after you close on a deal, go ahead, do a quick claim deed, create an LLC, and then switch it to that LLC, and then have a holding LLC that controls all of them and a holding company, etc.

01:59:10.000 There is a little bit of risk with it.

01:59:12.000 Yeah.

01:59:13.000 Because the lender can call the loan due if they find out that you did that.

01:59:17.000 Because they made the loan to someone in their personal business.

01:59:20.000 It doesn't mean that they will.

01:59:21.000 It doesn't mean that you can't.

01:59:22.000 But you have to look at the terms of the mortgage and then don't just assume you can do that.

01:59:27.000 Good point, yeah.

01:59:27.000 Check the terms.

01:59:28.000 Really good point.

01:59:30.000 That is true.

01:59:31.000 This is coming up a lot more with the creative financing stuff because nobody wants to pay an 8.5% rate if they can take over someone else's 3.5% rate loan.

01:59:38.000 But you got to remember that the lender made the loan to you.

01:59:40.000 And if you're assuming that loan, they never looked at your credit score.

01:59:43.000 They never looked at your debt to income ratio.

01:59:45.000 They didn't make the loan.

01:59:46.000 So they have the right in most cases, what's called a due on sale clause to say, hey, if you've given that title to somebody else, we have a right to demand the entire mortgage be paid off.

01:59:56.000 From us.

01:59:56.000 It doesn't mean that they're always going to do that.

01:59:58.000 Most of the time, the way that their systems work, as long as that check's coming in, they don't care.

02:00:03.000 And it's very common for real estate investors to put it in an LLC. But yeah, if you try to shield it and sell it to somebody or some other, yeah, that can fuck you up.

02:00:12.000 Yeah, absolutely. 0.92

02:00:13.000 Makes sense.

02:00:13.000 Good point to mention.

02:00:15.000 And then step 11, last one, is honorable mention here.

02:00:19.000 Rinse and repeat, guys.

02:00:20.000 You follow those 10 steps again, and you do that again.

02:00:23.000 Speaking of burr, it's like 40 degrees inside the studio right now.

02:00:26.000 Yeah, it's freezing, bro.

02:00:29.000 You're good. 0.99

02:00:30.000 You're white, nigga. 1.00

02:00:31.000 So it says here, you know, rinse and repeat. 0.99

02:00:33.000 If you acquired it through an FHA, guys, wait a year, live in it, and then you can go ahead and get another FHA. I think you can have up to, what, four FHAs in a lifetime?

02:00:41.000 No, usually you can only have one at a time.

02:00:43.000 One at a time.

02:00:44.000 I'm saying once you complete that first year.

02:00:46.000 In total.

02:00:47.000 I think as long as you've paid off your FHA, you can get another one.

02:00:51.000 You can always have one, basically.

02:00:53.000 But once you get an FHA loan, you can't get another FHA loan when you already have one.

02:00:57.000 I thought there was a cap at four.

02:00:58.000 Here's the thing.

02:00:59.000 I've heard you mention FHA before.

02:01:00.000 There's like a slight subtle difference, right?

02:01:03.000 FHA itself is different than a primary residence loan.

02:01:06.000 It is a type of primary residence loan.

02:01:08.000 Yes, yes, yes.

02:01:09.000 So if a primary residence loan, you can get conventional loans at 5% down.

02:01:13.000 FHAs are 3.5%.

02:01:14.000 Yeah.

02:01:15.000 So once you have four loans that are conventional mortgages, it becomes harder to get more.

02:01:22.000 That's what you're thinking of.

02:01:23.000 Then when you get to 10, you're not allowed to get another investment property under conventional financing.

02:01:27.000 Yes.

02:01:28.000 So I think when you're saying FHA, you just need to live in it.

02:01:31.000 You won't get the Fannie Mae and Freddie Mac loans anymore, which is I'm past that, so I'm doing different lenders now.

02:01:34.000 You have to do like non-QM like we were talking about. 1.00

02:01:36.000 You get DSCR loans or portfolio lenders will do that, but...

02:01:40.000 As long as you're saying, when you say FHA, if you mean live in the property...

02:01:43.000 Yeah, that's what I meant.

02:01:46.000 Primary residence type loans.

02:01:47.000 That's what I meant.

02:01:48.000 We conflate with FHA typically because that's the leading one, but that's what we mean.

02:01:52.000 Where you're basically putting very little down, 3.5% to 5% down, you can do that up to four times.

02:01:58.000 And that will help you get your situation starting, guys.

02:02:01.000 Get your real estate portfolio cracking, especially if you don't got 20% down to put as an investor, which is fine.

02:02:05.000 A good experience, too.

02:02:06.000 And then you just rinse and repeat, guys.

02:02:07.000 And that is how you go ahead, guys, and get into the real estate game.

02:02:11.000 So this is the ultimate basic guide for a beginner from 0 to 100.

02:02:15.000 Step by step, man.

02:02:16.000 With David Green from Baker Pockets.

02:02:17.000 Yeah, man.

02:02:18.000 Yeah, and that's pretty much it, man.

02:02:20.000 Dave, you got anything to tell people?

02:02:22.000 They got some hot sauce on this.

02:02:23.000 There is some deep stuff that most people will spend their whole life investing in real estate and not understand with negotiation tactics.

02:02:29.000 I mean, last time I was here, you only had like six properties.

02:02:32.000 Dude, you're on fire right now.

02:02:34.000 It's good to see you.

02:02:34.000 I'm trying to get to your level, bro.

02:02:36.000 You got way more than me.

02:02:37.000 Wait, how much you got right now?

02:02:40.000 Well, I have about 50 million dollars worth of real estate.

02:02:43.000 I don't know how many... 0.99

02:02:44.000 Goddamn! 1.00

02:02:45.000 See bro, we're fucking up. 1.00

02:02:46.000 Yeah, 50 million. 0.99

02:02:48.000 50 million worth of real estate.

02:02:50.000 I have like 12,000 YouTube subscribers.

02:02:52.000 You guys are doing okay.

02:02:54.000 Bigger Pockets is huge, man.

02:02:56.000 Actually, I started watching Bigger Pockets before I bought my first property.

02:03:01.000 Yeah.

02:03:01.000 You and Graham Stephan.

02:03:02.000 Yeah.

02:03:03.000 Really?

02:03:03.000 Yeah.

02:03:04.000 How's that?

02:03:05.000 Scott Trench, his book, Step for Life.

02:03:08.000 Step for Life?

02:03:08.000 Yeah.

02:03:09.000 Good book.

02:03:09.000 That's another one.

02:03:10.000 So basically that book I wrote, Pillars of Wealth, is kind of an extension of Set for Life.

02:03:14.000 Yes. 0.99

02:03:15.000 Damn. 0.99

02:03:15.000 Guys, go get the book, man. 0.99

02:03:16.000 Yeah, go support him, man.

02:03:17.000 Yeah, go support him, guys.

02:03:18.000 You can see here, obviously, he's very savvy.

02:03:21.000 He knows more than myself.

02:03:22.000 You know, real estate guru.

02:03:23.000 For real, walk the talk.

02:03:25.000 He's talk the talk and walk the walk.

02:03:27.000 And you were involved in multiple.

02:03:29.000 You're on the lending side.

02:03:30.000 You're on the purchasing side as an investor.

02:03:31.000 You're on the realtor side.

02:03:32.000 So you literally know real estate from all perspectives.

02:03:35.000 Like me, I could talk to y'all.

02:03:36.000 From an investor standpoint, but I can't talk to you from a realtor perspective.

02:03:42.000 I could give you guys kind of an idea from the lending perspective because I've dealt with it, but I'm limited to only the loans that I've done.

02:03:47.000 Dave could talk to you all about all of it because you're involved in almost every spectrum of real estate, man.

02:03:52.000 Real estate nerd.

02:03:53.000 Yeah, so this is a guy that you definitely want in your corner.

02:03:55.000 There you go.

02:03:57.000 This is someone you definitely want in your corner, guys.

02:04:00.000 Okay, Cardinal goes, is there an accepted standard formula for calculating the rent on a property in return to turn a profit and stay competitive for price per square foot?

02:04:08.000 No, not price per square foot, but there is one for the purchase price of the home.

02:04:11.000 I think you talked about the 1% rule.

02:04:13.000 Yeah, that's tough to hit nowadays.

02:04:15.000 But the idea would be if you can get rents every month that are around 1% of what you paid for the property, it's likely to cash flow.

02:04:22.000 Yeah.

02:04:22.000 So you buy a $100,000 property, you want it to rent for around $1,000 a month.

02:04:26.000 At least.

02:04:27.000 Is there an accepted standard for...

02:04:28.000 Sorry, okay.

02:04:29.000 I've been waiting for this one.

02:04:30.000 Yes, sir.

02:04:30.000 Also...

02:04:31.000 Chris, keep running up that food tab.

02:04:33.000 Matter of fact, this tip is going towards you.

02:04:34.000 Change, modern, and fresh.

02:04:36.000 One dollar, bro.

02:04:37.000 That's not enough for Chris.

02:04:38.000 Bro, for real. 0.78

02:04:39.000 The hell, man? 0.91

02:04:40.000 All right. 0.70

02:04:41.000 Which is safer to invest in residential or commercial?

02:04:43.000 Residential, 100%.

02:04:44.000 All the way.

02:04:45.000 Could you read my previous?

02:04:47.000 Also, thank you for everything, guys.

02:04:48.000 Your content has taken my credit from 640 to 720.

02:04:51.000 Now being smarter, but what credit cards to get?

02:04:53.000 I'm sales driving for a company, one of them boys, and use all my time slash they're working listening to books and podcasts, WFNF, to also just purchase your book, David.

02:05:01.000 Shout out to you, my friend.

02:05:01.000 Good stuff, man.

02:05:03.000 Taking that initiative.

02:05:04.000 Worst generation, I'm 18.

02:05:05.000 You think I should do a real estate wholesaling part-time while I'm working full-time, making $25 per hour, or work two jobs and only focus on the jobs?

02:05:14.000 How did you know that pH was per hour?

02:05:18.000 Because I said 25, full-time making 25.

02:05:21.000 You start to assume after a while.

02:05:22.000 Yeah.

02:05:22.000 It's pretty smart.

02:05:23.000 Yeah, I just was, yeah.

02:05:25.000 But, I mean, just weigh the pros and cons, man. 0.97

02:05:28.000 Like, two jobs isn't bad, but if you can make more doing wholesaling, shit, why not? 0.98

02:05:32.000 Yeah. 0.99

02:05:33.000 Because of sales.

02:05:33.000 Focus on the skills that you're building wholesaling, because you're probably not going to make a ton of money right off the bat.

02:05:38.000 Yeah.

02:05:38.000 But if your mouthpiece gets better, I mean, being able to articulate yourself is an incredibly valuable skill to have.

02:05:44.000 You guys are great examples of that.

02:05:45.000 Definitely, man.

02:05:46.000 Well, him better than me, but yeah.

02:05:47.000 I'm working on it.

02:05:48.000 Thanks for the advice.

02:05:49.000 This house is $400K in Oregon at 7.7% interest rate.

02:05:52.000 I make $3,800 a month.

02:05:53.000 I want to house hack and update the house myself since I'm handy.

02:05:55.000 I'm just worried if I keep waiting, the money I make won't measure up in the market.

02:06:01.000 No, man.

02:06:02.000 Bro, always... 1.00

02:06:03.000 If you're a handyman, fucking update that house, bro. 0.99

02:06:05.000 Just the biggest thing, though, because a lot of people make this mistake, don't sit there and make the house too luxurious. 0.99

02:06:10.000 Oh, yeah.

02:06:10.000 People do that.

02:06:11.000 Put chandeliers and marble countertops and all this other extra shit. 0.99

02:06:15.000 Bro... 1.00

02:06:15.000 You don't need to do all that extra shit. 1.00

02:06:17.000 If you live in it and it's your home and you don't plan to move or rent it out, cool. 0.98

02:06:20.000 But making things too luxurious a lot of times is going to hurt your cash on cash returns.

02:06:24.000 And tenants don't appreciate it regardless. 1.00

02:06:25.000 Yeah, they're going to fuck your shit up. 1.00

02:06:26.000 You just got to go fix it again. 1.00

02:06:28.000 But see, that person does have a pretty big advantage because they can buy real estate and pay a price that I couldn't pay.

02:06:33.000 Because I got to go pay a contractor or a handyman and there's a margin that I'm going to have to pay.

02:06:37.000 They can do that work themselves and they can do it over the time that they live in the house so they don't have to pay hard money or anything to get that place fixed up.

02:06:43.000 They should be looking for messed up houses and Captain Save-A-House.

02:06:47.000 Yeah.

02:06:48.000 If you're a handyman, guys...

02:06:50.000 You know renovation stuff like that, and you could do it yourself.

02:06:54.000 That's a huge.

02:06:55.000 That's a W. That's a big W. That's where I would say it might be worth it to spend that time doing it yourself because your returns are gonna be crazy.

02:07:01.000 Yep.

02:07:01.000 Also, materials now are way more expensive, bro.

02:07:04.000 Yeah. 0.95

02:07:05.000 Holy crap. 0.99

02:07:06.000 Yep. 0.95

02:07:06.000 It is. 0.95

02:07:07.000 Ever since the conflicts in Russia, Ukraine, now we got the Middle East, and materials always go up in times of war, man.

02:07:12.000 So that's just what it is.

02:07:13.000 That's what we get for importing everything into our country.

02:07:16.000 Absolutely.

02:07:16.000 What can they find your brother?

02:07:17.000 They can find me at davidgreen24.

02:07:19.000 There's an E at the end of green on Instagram.

02:07:21.000 They can check out the BiggerPockets podcast.

02:07:23.000 We put out three episodes a week right now teaching people how to build wealth in real estate.

02:07:27.000 Or they can go to davidgreen24.com and see what I got going on.

02:07:29.000 Are you talking family to Robert Green?

02:07:31.000 We joke that we are.

02:07:33.000 We joked because we interviewed him on our podcast.

02:07:34.000 We pretend like we were cousins.

02:07:36.000 We're white, but not every white person is related.

02:07:39.000 Last question for you, bro.

02:07:40.000 Are you one of them boys?

02:07:49.000 We'll catch you on the next episode of Fresh and Fit Man on After Hours Man.

02:07:53.000 He's David Green.

02:07:54.000 Check him out on BiggerPockets and his website.

02:07:55.000 Get the book, man!

02:07:56.000 Let's go!

02:07:57.000 Stop being a brokie. 1.00

02:07:58.000 Pillars of Wealth.

02:07:59.000 The book is probably cheaper than what you would spend on some...

02:08:02.000 Real estate! 1.00

02:08:02.000 ...some whore that doesn't even like you at the bar, man. 1.00

02:08:05.000 So... 1.00

02:08:05.000 We'll catch you guys back here for After Hours. 1.00

02:08:07.000 Love y'all.

02:08:08.000 This is the most best men's podcast in the world.

02:08:10.000 Real Estate 101.

02:08:11.000 Real value.

02:08:12.000 Peace.

Fresh & Fit - October 23, 2023

How To Buy Your 1st Rental Property w- Bigger Pockets Step By Step (Novice to Advanced)

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