Valuetainment - Buy or Rent a House - The 7 Rules No Realtor Will Tell You

00:00:00.000 You ever buy something and afterwards your stomach gets up, so you're like, oh my God,

00:00:03.080 did I buy this car?

00:00:04.080 I shouldn't have bought this car.

00:00:04.760 I don't know if I can afford $100, $800 payment.

00:00:06.900 Should I have bought this house?

00:00:08.000 Why did I buy this house?

00:00:08.980 If you're going through that anxiety of wanting to buy a house or renting a house, I have

00:00:13.220 one simple goal by the end of this video.

00:00:15.160 I want you to be resolved by the time you're done watching this video to say, I'm glad

00:00:19.280 I'm not buying or I'm glad I'm going to buy and I feel very good about it based on the

00:00:23.800 seven markers I'm going to share with you in today's video.

00:00:30.000 All right, if you get value out of this video, give it a thumbs up and subscribe to the channel.

00:00:34.640 Before I share the seven things with you, I think it's important for us to see what the

00:00:37.940 current conditions are in real estate.

00:00:40.120 So this chart may scare you a little bit because this shows the cost of renting today is $18.45

00:00:45.800 per month.

00:00:47.180 The cost to buy today is $800 more, give or take, $26.97 a month.

00:00:53.040 You may watch this and say, Pat, why do I need to watch the rest?

00:00:56.020 Just based on this, I should just rent.

00:00:57.940 Stick around.

00:00:58.600 Next one, what it costs to buy a house today.

00:01:02.060 That's the number.

00:01:02.860 That's the U.S. median household income today.

00:01:06.080 But this is where you need to be to qualify to afford a U.S. median home today.

00:01:12.300 So let me get this straight.

00:01:13.500 This is what we're making, but this is what it qualifies to buy a house.

00:01:16.800 Yes.

00:01:17.320 How the hell did we get here?

00:01:18.440 Look at this chart.

00:01:19.720 This is good because the numbers match each other.

00:01:22.900 When's the last time the difference was massive right here?

00:01:25.820 What happened in 2008?

00:01:27.320 Well, we know what happened in real estate, right?

00:01:28.820 Everything dropped.

00:01:29.580 There was a foreclosure.

00:01:31.500 Everybody was doing loan modifications.

00:01:33.020 It was nasty.

00:01:34.580 But this is a scary place to be when you're looking at this chart.

00:01:38.320 Now, let's continue.

00:01:39.020 Let's keep going with this.

00:01:40.280 What else can we learn?

00:01:41.340 This next one.

00:01:42.000 In 2015, buying was 22% cheaper than renting just 10 years ago.

00:01:48.580 But in 2024, guess what?

00:01:51.400 Renting is cheaper.

00:01:54.080 Buying has become 21% more expensive than renting today.

00:01:59.560 Nine years ago, better to buy.

00:02:01.420 Nine years later today, better to rent.

00:02:04.240 Let's continue.

00:02:05.240 Next one for you.

00:02:05.960 In 1960, the median house cost about two and a half times your income.

00:02:12.140 In 2020, it cost five and a half times.

00:02:14.220 You know what that number is today?

00:02:15.480 Eight and a half-ish.

00:02:16.900 Eight to eight and a half-ish.

00:02:18.340 This is small home construction from 1975 till today.

00:02:21.860 No one's building small homes.

00:02:24.160 Used to be 40% of it.

00:02:25.640 Now it's less than 10%.

00:02:26.920 That's 7%.

00:02:27.900 Nobody, no builder's interested in building small homes.

00:02:30.620 Now, you may say, that's because they're so greedy.

00:02:32.880 All they care about is making money.

00:02:35.060 Everything you look at is more expensive.

00:02:37.400 Those guys want to build.

00:02:38.960 It's just more expensive.

00:02:39.960 I'll show it to you here in a second.

00:02:41.260 Look at this one here, okay?

00:02:43.320 1970.

00:02:44.340 10% of the homes we built were two bedrooms.

00:02:47.920 And then if you look at the four bedrooms, it used to be only 20%.

00:02:50.780 What is it now?

00:02:51.720 48% of the homes we built are four bedrooms.

00:02:53.980 Most people don't need four bedrooms.

00:02:55.540 And three-bedroom homes used to be 65% has dropped to 43%.

00:03:00.500 We're not building three bedrooms anymore.

00:03:02.200 It's four bedrooms.

00:03:03.080 Here's what's crazy.

00:03:04.380 We're building more bedrooms while people are having fewer kids. 0.51

00:03:07.820 This does, it's not as if you need more bedrooms.

00:03:09.600 You're not having more kids.

00:03:10.700 It's the lowest birth rate we've ever had in the history of America.

00:03:13.900 But let me continue with this.

00:03:15.080 A couple other charts I want to show you.

00:03:16.940 So all these greedy builders that we're looking at, this is what they're dealing with.

00:03:21.100 Framing, interior finishes, the cost of major systems, foundation.

00:03:24.760 You got exterior finishes, land development, all the stuff that you go through.

00:03:29.320 And you know what you see on this one?

00:03:30.820 Look at this.

00:03:31.800 Here, it shows us what is the price of concrete and cement.

00:03:36.400 Look where it was in 2004.

00:03:38.840 And look where it is now, 2025.

00:03:41.840 They're wanting to build smaller homes, but they can't afford it.

00:03:45.460 It's grown so much.

00:03:46.780 They're sitting around saying, what do you want me to do?

00:03:49.000 Now, the average person says, so should I buy real estate or invest into stock market?

00:03:52.760 What should I be doing?

00:03:53.980 If you go from 1971 until today, this is Wall Street Journal, the blue is U.S. median housing

00:03:59.800 price.

00:04:00.180 So somebody may say, why would I buy housing?

00:04:02.080 If I would have put my money in S&P 500, you mean to tell me this is S&P 500 versus housing?

00:04:08.100 That's according to Wall Street Journal.

00:04:09.580 So people are asking important questions, which I'm kind of happy we're here asking these

00:04:14.800 types of questions.

00:04:15.800 Now, let's go back to it.

00:04:17.680 You said, Pat, you're going to share with us the seven things before I, whether I should

00:04:21.740 buy or rent.

00:04:22.740 I am.

00:04:23.740 Everybody needs formulas when they're making decisions like this.

00:04:27.200 A couple of formulas for you to consider.

00:04:28.700 Number one, when it comes down to buying or renting, take the median home price, then

00:04:35.000 divide it by 12 times the median monthly rent that gives you the formula to buy your rent.

00:04:40.440 You're saying, Pat, I think I lost you.

00:04:41.580 Stay with me.

00:04:42.560 Say the house you're buying is $400,000, okay?

00:04:46.160 And let's just say the median monthly rent today is $2,000.

00:04:51.480 If I take 12 times $2,000, it's $24,000.

00:04:55.620 $400,000 divided by $24,000, what do I get?

00:04:59.120 16.6.

00:05:01.040 The formula is, if the number you get is under 15, time to buy.

00:05:06.260 If it's between 16 to 20, it's up to you.

00:05:09.700 If it's 21 plus, maybe it's time to rent.

00:05:12.560 Very simple formula to follow.

00:05:14.560 Number two, your credit score could be also a big factor whether you should buy or rent.

00:05:18.940 What do I mean?

00:05:20.060 Well, if you're trying to get a national median home price in June of 2025, which is $435,

00:05:24.680 if your credit score is 717, your rate's going to be 7.42.

00:05:28.900 Payment's $3,018.

00:05:30.660 But if your credit score is 800, you may get a 6.22 rate.

00:05:34.620 Mortgage is now $26.74.

00:05:36.500 That's a $300 difference.

00:05:37.920 So maybe for you, it's not a good time to buy.

00:05:40.760 Maybe it's a good time for you to fix your credit.

00:05:42.900 That's your focus.

00:05:43.720 I had to go through that because my credit score literally in 2005 was 484, 495, 499.

00:05:51.080 Till today, I've kept the credit score, especially with all the credit costs that I paid off over the years.

00:05:55.800 I have the folder like this in my office till today.

00:05:58.820 Number three, location, city, state, where you choose to live.

00:06:02.920 Right now, the average house in America is 1,840 square feet.

00:06:07.860 And the average national, what is the price, the 435 is a national median price is $435,000.

00:06:16.920 So rent for 1,840 square foot home today.

00:06:20.520 It's like a three bedroom house, let's just say.

00:06:22.480 You're looking at in LA, 4,600.

00:06:25.720 In Miami, 3,300.

00:06:27.880 In Dallas, 2,700.

00:06:29.900 In Nashville, 2,580.

00:06:31.460 In OKC, 2,025 dollars.

00:06:34.720 This is why location, city, state matters based on what phase of your life you're at.

00:06:38.800 Now, you may say, well, Pat, what if I'm solving for the amount of money I can buy?

00:06:42.680 I can only afford to buy a $435,000 property by these cities and states.

00:06:46.900 What do I fall under?

00:06:48.160 In LA, you can only buy with 435, 1,000 square foot property.

00:06:52.620 Miami's 1,500.

00:06:53.820 Dallas is 2,000.

00:06:55.520 Nashville is 2,000.

00:06:56.560 But in OKC, you get a 3,000 square foot house overnight.

00:07:00.720 Maybe you can become a shy Alexander fan, big OKC, you know, what is it, Thunder, right?

00:07:05.980 They won the NBA championship last year.

00:07:07.940 So maybe you ought to consider going to OKC based on where you are.

00:07:10.720 You may say, Pat, there's no way I'm going to OKC.

00:07:12.940 Fine, stick around.

00:07:14.640 Number four is phase of your life.

00:07:18.660 You're in.

00:07:19.520 Let me explain.

00:07:20.500 You're single.

00:07:21.980 So you may want to be a little bit nimble.

00:07:23.680 You're like, I don't know if I should buy or not.

00:07:25.240 Should I, should I not?

00:07:26.380 Maybe you're married with kids and your expenses are high.

00:07:29.940 Maybe you're an employee and you have a steady job.

00:07:33.460 Maybe you're an employee.

00:07:34.240 You just got started.

00:07:35.060 It's not steady.

00:07:36.260 Maybe you're an employee at a company that you may get promoted.

00:07:38.800 And to get promoted requires you to move to a different state or a different country.

00:07:42.220 Well, why would I buy if I can get that kind of a promotion?

00:07:44.840 Maybe you're an entrepreneur.

00:07:46.440 Maybe you're a business owner, entrepreneur, and depends early, mid, late stage.

00:07:50.500 I remember when we started my insurance company.

00:07:52.320 I'm doing a meeting on September 24th of 2009.

00:07:54.880 My wife's all the way in the back. 0.99

00:07:56.140 I'm at 8550 Balboa Boulevard in Northridge, California.

00:07:59.780 I get up and I say to everybody, I have $500,000 saved.

00:08:04.040 I'm taking this $500,000 and I'm not buying a house.

00:08:06.660 I was about to buy a $1.5 million house in Monteria States, Winnetka, California.

00:08:10.880 Me and my wife love this house.

00:08:12.140 I said, babe, I want to tell you, I'm not buying a house for at least five years.

00:08:16.020 We didn't buy a house for seven years.

00:08:17.180 I took that money and I put that money.

00:08:19.720 We didn't buy a house for five and a half years, six years.

00:08:22.340 I put that money into the business and I grew it.

00:08:24.880 Then I moved and I moved again three times.

00:08:27.500 We have four kids born in three different states.

00:08:30.380 So again, the idea of buying a house has to do with where you are with your career, life,

00:08:35.780 marriage, personal life, all of that matters.

00:08:37.960 So let me get to the next one.

00:08:39.600 Okay, timeline.

00:08:40.600 Timeline means what?

00:08:41.900 If you're buying a house and your timeline is three years, do not buy.

00:08:46.600 Keep renting.

00:08:47.720 If you're buying a house and you're thinking, well, three to seven years, maybe a little

00:08:51.240 bit more open to it.

00:08:52.700 If your timeline is, you know what?

00:08:53.780 I just need a place to live and I know I'm going to be here for seven years.

00:08:56.340 You can make a confident decision knowing you're not moving because there's nothing

00:09:00.360 more annoying than you buy a place knowing in two years you're moving like, why did I

00:09:04.620 buy this property?

00:09:05.300 I got to move now.

00:09:05.940 I got to rent it.

00:09:06.620 I got to get a new place.

00:09:07.760 Headache.

00:09:08.140 So again, we're solving for what?

00:09:10.420 The anxiety of buying a home.

00:09:12.080 And after you buy something, you're like nervous whether you can afford it or not.

00:09:15.220 I want you to make a decision buying based on a formula where you say, I am very resolved

00:09:19.860 with the decision I'm making.

00:09:21.580 Six, politics.

00:09:23.020 Here we go again.

00:09:23.720 We're talking about politics.

00:09:25.060 It matters when you're buying a house.

00:09:26.640 Let me explain why.

00:09:27.820 If you're in a city like New York City, okay, regulation is high.

00:09:33.680 Crime is high.

00:09:35.640 A new person's getting elected like Mom Donnie, let's just say he wins.

00:09:39.260 You're like, what is going to happen to the city when I, when this guy gets elected?

00:09:42.840 We know what happened during COVID.

00:09:44.880 A lot of people from New York City moved to Tennessee and Florida.

00:09:47.360 A lot of people from California moved to Nevada, Arizona, and Texas.

00:09:50.540 Illinois was Tennessee, Florida.

00:09:52.240 You have to sit there and consider the politics in the city and the state you're living in

00:09:56.060 because that's good.

00:09:56.980 This is why a long time ago when people say, I don't like the fact that you're talking

00:10:00.640 about politics.

00:10:01.760 Business is politics.

00:10:03.480 Religion is politics. 0.99

00:10:05.160 Every family is politics.

00:10:06.600 Everything you do has to do with paying attention to politics because those regulations impact

00:10:12.960 the safety of your kids.

00:10:14.480 And if it's a place you want to be there long term.

00:10:16.120 So based on this, if you're optimistic about the politics of where you live and regulation,

00:10:20.920 guess what?

00:10:21.460 I feel more comfortable.

00:10:23.120 If you're not, you may want to wait till November 5th to see who becomes a mayor in

00:10:26.680 your city.

00:10:27.100 And that's New York City.

00:10:28.060 You may want to wait to see who becomes a governor of the state.

00:10:30.580 You may want to wait before you do that.

00:10:32.160 Or you may have to move.

00:10:33.100 If you're saying, I don't think the state's going to change at all, I have to think about

00:10:36.560 making some moves.

00:10:37.320 And last but not least, number seven is cost of insurance.

00:10:40.060 I've been in the insurance space since 2001, 2002.

00:10:42.960 This matters.

00:10:44.320 Risk by state.

00:10:45.440 I live in Florida.

00:10:46.760 We have a very bipolar weather here.

00:10:49.320 One minute it's beautiful.

00:10:50.440 Next minute it's storming, lightning.

00:10:52.500 Then again, the sun is back out.

00:10:53.760 So anything could happen.

00:10:55.360 Cost of insurance varies by state.

00:10:56.920 So when you're buying a house, a lot of people in California right now, there's an article

00:11:00.700 that came out that a lot of insurance companies are leaving.

00:11:03.380 Seven percent of homes are not closing in California because the moment people say,

00:11:07.560 I'm qualified.

00:11:09.040 This is awesome.

00:11:10.260 This is great.

00:11:11.340 Wait, how much is homeowner's insurance?

00:11:13.100 Babe, I can't afford this because $3,000 plus this plus that, babe, I'm sorry, we're

00:11:17.360 out.

00:11:17.540 We're not buying this house.

00:11:18.800 Seven percent of homes don't close in California simply because the owners cannot afford to

00:11:23.280 pay the homeowner's insurance.

00:11:24.520 So most expensive homeowner's insurance, Oklahoma, number one.

00:11:29.240 You may say, why Oklahoma?

00:11:31.220 Tornadoes.

00:11:31.760 Then you got Nebraska, Kansas, Texas, Kentucky.

00:11:34.960 Least, which is kind of weird.

00:11:36.200 Hawaii is low.

00:11:38.100 Vermont, Bernie Sanders, low.

00:11:40.760 Alaska, if you want to move to Alaska, it's great.

00:11:42.740 About a couple months of the year, it's great.

00:11:44.480 Delaware, okay, low.

00:11:46.480 West Virginia, low.

00:11:48.160 These are some of the things you have to be thinking about before you make a decision

00:11:52.140 to buy a house.

00:11:53.020 So if you're watching this and you say, man, I already own a house, but my kids are about

00:11:56.480 to buy a house.

00:11:57.040 Share this video with them.

00:11:58.460 Man, I'm thinking about buying a house, but maybe I need to watch this with my wife. 1.00

00:12:01.560 Watch this again with her.

00:12:03.100 Share it with people that are about to go through this because there's nothing like making a

00:12:07.600 decision that you don't look back and you're not nervous at all because you put a lot of

00:12:10.800 time thinking about it up front.

00:12:11.940 And when you do so, you get to actually enjoy the home you're living in or you get to actually

00:12:18.160 enjoy the apartment or the house you chose to rent because you have your formula down.

00:12:22.640 You're good about it, right?

00:12:23.640 You have a plan in place, especially now that 2026 is getting closer.

00:12:27.360 So if you got value out of this video, give it a thumbs up and subscribe to the channel.

00:12:32.840 Number two, if you're watching and say, man, I got a lot of questions, Pat.

00:12:36.280 How can I ask you the questions?

00:12:37.740 We built the Manect app just so you can ask me questions and others questions.

00:12:42.500 We're going to put the link below.

00:12:43.820 You can go there, ask me any questions you want.

00:12:46.080 And if I don't know it, I'll refer you to somebody else on Manect that you can ask that

00:12:49.000 can get you even a little bit deeper on this because you may have real questions about

00:12:52.140 should we buy the house?

00:12:52.900 This is a situation where and it's a little bit different.

00:12:54.540 I'm thinking about this.

00:12:55.300 What should I do?

00:12:56.540 Manect me.

00:12:57.120 I'll get back tonight.

00:12:58.020 Always answer back in audio on Manect.

00:13:00.580 Number two, if you want all the notes that we discussed, go to PBD Entrepreneur Circle on Manect.

00:13:05.180 We'll put the QR code here as well.

00:13:06.480 You get all the notes, all the research that I have here that our great team Brandon did.

00:13:10.800 We'll give that all over to you.

00:13:12.320 And last but not least, if you enjoyed this video, I did another video about three, four

00:13:15.880 weeks ago talking about the top 10 most important decisions you'll make in your life.

00:13:19.260 If you've never seen it, click here to watch.

00:13:21.140 I'll take care, everybody.

00:13:21.900 Bye-bye, bye-bye.

Valuetainment - October 29, 2025

Buy or Rent a House - The 7 Rules No Realtor Will Tell You

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