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Study Hall: House Hacking with MG the Mortgage Guy · Earn Your Leisure

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  Speaker 2: My graduates from my school being forced back drop Mike
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  Speaker 4: We're going to talk today about how to get really
• 2:04
  Speaker 4: real estate one on one. So kind of average person
• 2:07
  Speaker 4: that doesn't come from, you know, affluent family and low
• 2:12
  Speaker 4: socio economic environment, how does someone get into real estate?
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  Speaker 2: Like, what would be the first step?
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  Speaker 5: Oh man, The first step personally, I think is mindset.
• 2:22
  Speaker 5: You got to make the decision because I think that's
• 2:24
  Speaker 5: numero ono right. But as far as financing, you need
• 2:27
  Speaker 5: to get pre approved, you need to know exactly what
• 2:30
  Speaker 5: you can qualify for. There's several different loans out there.
• 2:34
  Speaker 5: So let's speak to the first time home buyer right now.
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  Speaker 5: What I try to coach all my first time home buyases.
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  Speaker 5: You know, most people want to go ahead and go
• 2:43
  Speaker 5: to White Planes or go to Long Island and buy
• 2:45
  Speaker 5: the nice single family home with the white pick offense
• 2:48
  Speaker 5: and this that and the third, right, which is cool.
• 2:50
  Speaker 2: If that's what you want to do, that's what you
• 2:53
  Speaker 2: gotta do. What you gotta do. You got the money
• 2:54
  Speaker 2: for well, you got to have the money for it though, right.
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  Speaker 5: But what I try to encourage all my first time
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  Speaker 5: home buyers, if you don't have a need for a
• 3:00
  Speaker 5: certain school district, or if you don't have, you know,
• 3:03
  Speaker 5: children that's going to junior high school or high school,
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  Speaker 5: then you should always start off with a multi family,
• 3:08
  Speaker 5: especially if you know you're looking to get into real
• 3:10
  Speaker 5: estate investment. You know at some point in your life,
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  Speaker 5: start off with a multi family anywhere between two to
• 3:16
  Speaker 5: four units.
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  Speaker 2: And you can use programs.
• 3:18
  Speaker 5: Like FAHA, which allows you to put down as little
• 3:20
  Speaker 5: as three and a half percent as a down payment,
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  Speaker 5: which is a terrific program.
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  Speaker 4: So three and a half would be that's pretty small percentage, yeah,
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  Speaker 4: so as opposed to I had to just outright put
• 3:33
  Speaker 4: like what is it normally twenty percent? No?
• 3:35
  Speaker 5: No, no, So you have FAHA that allows you to
• 3:37
  Speaker 5: put down three and a half percent, and also conventional
• 3:40
  Speaker 5: loans allow you to put down a two US three percent,
• 3:42
  Speaker 5: but you have to qualify, you have to be a
• 3:44
  Speaker 5: certain income restrictions. If you're buying multi families, you have
• 3:48
  Speaker 5: the you know, white planes. The income restriction is probably
• 3:51
  Speaker 5: ninety six thousand, So if you exceed that, then you
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  Speaker 5: won't qualify for that three percent down on a multi family.
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  Speaker 5: Then you'll probably have to put down as fifteen percent
• 4:00
  Speaker 5: because it's.
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  Speaker 2: Gonna be a boy my residence.
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  Speaker 5: But FAHA is always a good tool because no matter
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  Speaker 5: it has to have any income restrictions, as long as
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  Speaker 5: you're within the county's long limits, then you can and
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  Speaker 5: you can credit and income qualify, which minimum credit scores
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  Speaker 5: a five to eighty For FJA loans, we're putting down
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  Speaker 5: as little's three to half percent. Buy that multifamily and
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  Speaker 5: you can live in it for twelve months and then
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  Speaker 5: move out of it, and then you can writ the
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  Speaker 5: entire the entire place out and now you created a
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  Speaker 5: cash flow investment property for yourself. And now you can
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  Speaker 5: now go ahead and go buy your one family or
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  Speaker 5: your condo or whatever you.
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  Speaker 2: Want, and now put them in on down payment as well.
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  Speaker 4: So each county has a set loan limits that you said.
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  Speaker 5: Yeah, so FHA has. Every county is different, right, So
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  Speaker 5: we're in like five boroughs west Chester long Island, so
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  Speaker 5: up to a four family, we can go to one
• 4:51
  Speaker 5: point three non seven million every county in America, every
• 4:54
  Speaker 5: county in America. So if you're you know, your audience
• 4:58
  Speaker 5: is probably all over the place, right, So if you
• 5:00
  Speaker 5: want to know what your your county loan limit is,
• 5:02
  Speaker 5: just you.
• 5:02
  Speaker 2: Can google it again. You know, if you're living in Kentucky, you.
• 5:06
  Speaker 5: Can google you know, FAK loan limits for Kentucky or
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  Speaker 5: whatever counties in Kentucky. Or if you're in Georgia, if
• 5:13
  Speaker 5: you're in when It County, you can google FAH loan
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  Speaker 5: limits for when It County, right, and they'll tell you
• 5:19
  Speaker 5: for one family, duplex, driplex for a plex, that's what
• 5:22
  Speaker 5: they call it out there.
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  Speaker 2: So that's why.
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  Speaker 6: So that's interesting because yeah, so that's interested in that
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  Speaker 6: you say that your first home should.
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  Speaker 2: Be a multi family, it should be a multi family absolu.
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  Speaker 6: A lot of people have the reverse mindset where they
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  Speaker 6: want to get the picket white fans as their first home,
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  Speaker 6: and then if they want to get like an investment property,
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  Speaker 6: then they'll look at multi family.
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  Speaker 2: Yeah.
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  Speaker 5: But see that's where they screw themselves, right, because now
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  Speaker 5: when you go ahead and you do that one family first,
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  Speaker 5: and you go do the multi family second. Now you
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  Speaker 5: got to put down twenty five percent. Now less you
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  Speaker 5: have twenty five percent plus closing costs, which is probably
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  Speaker 5: you probably spend around thirty percent for that transaction.
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  Speaker 2: Then guess what, you You just screwed yourself.
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  Speaker 5: Now it's gonna it's gonna be harder for you to
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  Speaker 5: get into that investment game. Now if you go ahead
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  Speaker 5: and you buy that that multifamily first using three and
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  Speaker 5: a half percent plus your closing costs, Now you have
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  Speaker 5: a multifamily. Potentially it's you're going to live in it
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  Speaker 5: because it has to be your prominent residence. You have
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  Speaker 5: to live in it for twelve months. Right after twelve months,
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  Speaker 5: you can move out free and clear, no problem. Now
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  Speaker 5: go ahead and buy another one family buy one family
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  Speaker 5: property and now still do a minimum down payment loan
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  Speaker 5: because you're moving out of one and moving into the
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  Speaker 5: other as your primary residence. So the key to anything
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  Speaker 5: is all on how you're structuring your loans and structuring
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  Speaker 5: your deal. Right, and if once you say investment property,
• 6:39
  Speaker 5: you automatically think twenty five percent down payment, you say
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  Speaker 5: from difference, that's a huge difference, and especially here and
• 6:46
  Speaker 5: where we are. You know, that can be a couple
• 6:48
  Speaker 5: hundred grand depending on that sales price. But if you
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  Speaker 5: go ahead and do multifamily, first minimum down payment, twelve months,
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  Speaker 5: you move out, move into your single family. Now you
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  Speaker 5: have an asset that's going to pay for itself and
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  Speaker 5: probably pay for you one family or a portion of
• 7:01
  Speaker 5: that one family. Right now, you created some sort of
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  Speaker 5: cash flow. I've had clients move from four family to
• 7:08
  Speaker 5: a two family, you know, and still was able to
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  Speaker 5: use minimum down payments. Now, if you use an FAHA loan,
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  Speaker 5: you can't go ahead move out of that four family
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  Speaker 5: property FAHA and then going to the two family FAHA
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  Speaker 5: because FAHA changed their rules a couple of years ago.
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  Speaker 5: You can't have two FAHA loans at the same time now, right.
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  Speaker 2: But you could use it again if you rea.
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  Speaker 5: What I tell everybody is this, right, you buy that
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  Speaker 5: four family or that multi family, you stay in there,
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  Speaker 5: you refinance it, You get out of the FAH loan,
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  Speaker 5: and you go into a conventional mortgage. Right, probably try
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  Speaker 5: to pull some equity out of that home so that way,
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  Speaker 5: now you can use that equity as a down payment
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  Speaker 5: for your new property. Now you're refinancing as a primary
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  Speaker 5: primary residence because you're still technically living in there, but
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  Speaker 5: your intent is obviously at some point to move out
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  Speaker 5: of it. Now you're taking that equity, you have a
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  Speaker 5: conventional loan on it. Now, now you're going to buy
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  Speaker 5: your one family. Great, you're going to go move in
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  Speaker 5: that one family. Now you can use FHA for that
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  Speaker 5: one family because this four family or multi family is
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  Speaker 5: now in the conventional mortgage and you took the equity.
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  Speaker 2: Out of there to help you purchase that one family.
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  Speaker 5: And now your tenants are not only paying for this property,
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  Speaker 5: now they're going to help pay for this property depending
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  Speaker 5: on the rentals and cash flow of that property. It's
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  Speaker 5: all about strategy at the end of the day. And
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  Speaker 5: most people don't lead with strategy. Most people lead with
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  Speaker 5: emotional And this is business at the end of the day.
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  Speaker 5: Like you know, I try to coach all my buyers
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  Speaker 5: think business. I don't care if you're going to live there.
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  Speaker 5: I don't care about any of that stuff. Men live,
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  Speaker 5: women live. Numbers don't at the end of the day.
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  Speaker 5: And if you're telling me your goals are to invest
• 8:47
  Speaker 5: in are to invest in real estate, then you.
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  Speaker 2: Need to think like an investor.
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  Speaker 5: Every first time home buyers should be thinking like an investor,
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  Speaker 5: Why go buy the flip? Why when there's programs out
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  Speaker 5: there for the first time home by like an f
• 9:00
  Speaker 5: h A two or three K long or Fanny Made
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  Speaker 5: Homestyle loan where you can get renovation and your mortgage
• 9:05
  Speaker 5: money all in one, all in one loan. Yeah, so
• 9:08
  Speaker 5: why not go on buy? Look, we spoke about Envy
• 9:11
  Speaker 5: and Caesar. These guys are not buying the flip right,
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  Speaker 5: They're going ahead and they're buying at.
• 9:16
  Speaker 2: The foreclosure auctions. They're buying short sales.
• 9:18
  Speaker 5: They buy the worst house in the best in the
• 9:21
  Speaker 5: best areas that they can, and they're putting that money
• 9:23
  Speaker 5: into it and now they're making their r O Y.
• 9:26
  Speaker 5: Why can't every first time home buy I think the
• 9:28
  Speaker 5: same way like the investor. Why does the nvs and
• 9:31
  Speaker 5: the Cazons of the world need to make all the money?
• 9:33
  Speaker 5: Why can't the first time home buy have that same
• 9:36
  Speaker 5: strategy and make the same returns. But you're gonna live
• 9:38
  Speaker 5: in it for a year, two years, three years, whatever
• 9:40
  Speaker 5: the case may be.
• 9:42
  Speaker 2: But now you're buying under market.
• 9:44
  Speaker 6: That's the whole So you would encourage anybody to go
• 9:47
  Speaker 6: into buying a home as an investment. Like, even if
• 9:49
  Speaker 6: somebody doesn't necessarily look at themselves a real estate investor,
• 9:52
  Speaker 6: I guess they are a real estate investor.
• 9:54
  Speaker 7: By buying homes investment. Whether you think you're investor or not,
• 9:58
  Speaker 7: you're investment.
• 9:58
  Speaker 2: You're investing or not.
• 9:59
  Speaker 5: So some people will tell you out there that your
• 10:02
  Speaker 5: primary residence or a single family home is not an
• 10:04
  Speaker 5: investment because it doesn't generate cash flow, right, which is true.
• 10:09
  Speaker 5: But to me, I don't think that's one hundred percent
• 10:11
  Speaker 5: true because you're looking at that equity, right. That equity
• 10:14
  Speaker 5: is what that first time home buy I should be
• 10:16
  Speaker 5: paying attention to. And when that equity gets to a
• 10:19
  Speaker 5: certain position, you need to act on it. You need
• 10:22
  Speaker 5: to do something with it. Because equity is monopoly money.
• 10:25
  Speaker 5: It's not guaranteed. The market crash twelve years ago, right
• 10:28
  Speaker 5: when every home was depreciating across America. So if that
• 10:31
  Speaker 5: doesn't tell people that equity is monopoly money, I don't
• 10:34
  Speaker 5: know what's going to tell them. So I have people
• 10:36
  Speaker 5: right now that may purchase a home in twenty eleven,
• 10:39
  Speaker 5: twenty twelve. Now they may have two hundred three hundred
• 10:42
  Speaker 5: thousand equity, and they don't want to touch it.
• 10:43
  Speaker 2: I'm like, what are you doing?
• 10:45
  Speaker 5: You need to take that money and do something with it,
• 10:48
  Speaker 5: because if the market corrects yourself, which it will at
• 10:51
  Speaker 5: some point, now, you're going to kick yourself that you
• 10:54
  Speaker 5: didn't jump in the game. Take that money to invest
• 10:56
  Speaker 5: in these opportunities zones right and build that generational wealthare yourself.
• 11:01
  Speaker 5: Because the market doesn't care about what's going on, the
• 11:04
  Speaker 5: market is going to do what the market wants to do.
• 11:06
  Speaker 5: So what I try to coach all my buias, my sellers,
• 11:09
  Speaker 5: my current homeowners whoever, don't let equity sit there because
• 11:14
  Speaker 5: it's not guaranteed.
• 11:15
  Speaker 2: You got to use it. If you don't use it,
• 11:17
  Speaker 2: then it's not it's nothing. It's monopoly money. That's real.
• 11:23
  Speaker 5: Don't the single family home is great, and I don't
• 11:25
  Speaker 5: have nothing against the single family home, but I think
• 11:27
  Speaker 5: the strategy moving forward should be multi family first, single families,
• 11:32
  Speaker 5: laiter down the road because you can always buy a
• 11:34
  Speaker 5: single family home. There's never going to be a shortage
• 11:36
  Speaker 5: of that. Look, what's happening in the housing is expensive.
• 11:39
  Speaker 5: Rent are going up. The rental market is booming right now,
• 11:43
  Speaker 5: So why not put yourself in that position to be
• 11:46
  Speaker 5: owner occupied landlord where you can basically live for free.
• 11:51
  Speaker 5: Now have your job, Now you can save all that
• 11:53
  Speaker 5: money to reinvest into.
• 11:55
  Speaker 6: Other realpers I think it goes back to where I
• 11:57
  Speaker 6: guess last week talked about as well. A lot of
• 11:58
  Speaker 6: times we care about we're perceived exactly, and it's like, okay, well,
• 12:02
  Speaker 6: how would I look living in a three family home.
• 12:05
  Speaker 6: I'd rather have the white picket fence with the backyard
• 12:08
  Speaker 6: and all.
• 12:08
  Speaker 2: That well, with the Mercedes side.
• 12:13
  Speaker 6: When you look at it from a financial standpoint, from
• 12:16
  Speaker 6: a lot of different reasons, it does make sense, all right, guys.
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  Speaker 7: Let's do it.
• 13:12
  Speaker 5: Oh absolutely, and the piggyback off of episode eleven, which
• 13:15
  Speaker 5: was a phenomenal, phenomenal, phenomenal phenomenal episode that So if
• 13:19
  Speaker 5: you guys haven't watched it eleven, you need to watch
• 13:22
  Speaker 5: that before you watch this to watch all the other
• 13:25
  Speaker 5: ten two.
• 13:26
  Speaker 2: Episode eleven was fire right, So.
• 13:29
  Speaker 5: What he he brought up a great point, right, mixed
• 13:31
  Speaker 5: use properties, which mixed use properties are common where we
• 13:35
  Speaker 5: are in New York. You can use faha long to
• 13:38
  Speaker 5: purchase a mix use property, which a lot of people
• 13:41
  Speaker 5: don't know, and put down three and a half percent
• 13:43
  Speaker 5: as long as fifty one percent of that mixed use
• 13:46
  Speaker 5: is residential. So you can go ahead and buy that
• 13:49
  Speaker 5: mixed use that may have a storefront, but two apartments
• 13:52
  Speaker 5: or three apartments as residential. And if you're a business owner,
• 13:55
  Speaker 5: if you're like he said, he runs a restaurant, now
• 13:58
  Speaker 5: he can live in that one of the units, have
• 14:01
  Speaker 5: the restaurant and still have two rental incomes coming in
• 14:04
  Speaker 5: to help support everything.
• 14:06
  Speaker 2: Now living for free.
• 14:07
  Speaker 5: His business is for free, and the mortgage is being
• 14:09
  Speaker 5: paid off, and you can use the two or three
• 14:11
  Speaker 5: k long to renovate it.
• 14:12
  Speaker 2: So you can go buy the piece of shit to
• 14:15
  Speaker 2: use property and use.
• 14:17
  Speaker 5: That renovation money is to fix it up, clean it
• 14:19
  Speaker 5: up and open up a business or rent it out
• 14:21
  Speaker 5: to another business owner the commercial aspect of it. And
• 14:24
  Speaker 5: now commercial rents are much higher than residential rents. So again,
• 14:29
  Speaker 5: living in for one year, now.
• 14:30
  Speaker 2: You move out.
• 14:31
  Speaker 5: Now you have a commercial property or under three and
• 14:34
  Speaker 5: a half under an FHA loan with three and.
• 14:37
  Speaker 2: A half persent down. Plush your clothing costs. We got
• 14:39
  Speaker 2: to know the game, man, You gotta know the game.
• 14:41
  Speaker 2: It's all about It's all about strategy.
• 14:43
  Speaker 5: And most people, especially listen, we're in the age of
• 14:45
  Speaker 5: the business owner the entrepreneur.
• 14:47
  Speaker 2: Right. Most people don't think you still need.
• 14:49
  Speaker 5: A brick and mortar, but some businesses you need a
• 14:52
  Speaker 5: brick and mortar, right, depending on if you're in a
• 14:54
  Speaker 5: service industry or whatever the case may be. If you're
• 14:56
  Speaker 5: in retail, if you want to open a store or restaurant,
• 14:59
  Speaker 5: like you said, one of the t off his businesses,
• 15:00
  Speaker 5: because the overhead right and rent is a big thing.
• 15:04
  Speaker 5: But if you have a mixed use property and you
• 15:06
  Speaker 5: want to open up a restaurant, why not use that
• 15:09
  Speaker 5: as your primary residents also for at least twelve months.
• 15:12
  Speaker 2: For that twelve month.
• 15:13
  Speaker 5: Sacrifice, get the loan living there because you always can
• 15:18
  Speaker 5: move out. And now you have a business that's basically
• 15:21
  Speaker 5: in there for free rental and rental property. So you
• 15:25
  Speaker 5: get you know, you're killing two birds with one stone,
• 15:27
  Speaker 5: so to speak. You get rental and your business in there,
• 15:30
  Speaker 5: and your your business is not going to have all
• 15:32
  Speaker 5: that overhead, the pressure of paying the rent because you
• 15:36
  Speaker 5: know what, it's your mortgage and your tenants are paying
• 15:38
  Speaker 5: for it upstairs.
• 15:39
  Speaker 2: So it's all about strategy.
• 15:41
  Speaker 7: Not all good in real estate.
• 15:42
  Speaker 6: It's never always a dangerous Now we're going to we're
• 15:46
  Speaker 6: going to explain that how things can go wrong, all right.
• 15:49
  Speaker 7: So, as I said, it's never all good in anything
• 15:52
  Speaker 7: in life.
• 15:52
  Speaker 2: Right.
• 15:53
  Speaker 6: So, real estate is something that's very popular, very trendy
• 15:59
  Speaker 6: right now, and very has this stigma I think of
• 16:02
  Speaker 6: everybody thinks they're just gonna get rich overnight, right, and
• 16:04
  Speaker 6: people don't know it's like any business. You know, when
• 16:07
  Speaker 6: you go into business without a plan, your destined to field.
• 16:09
  Speaker 2: Right.
• 16:10
  Speaker 7: So if you plan to be a real estate investor.
• 16:12
  Speaker 7: And as you said, whether you think you're investor or not,
• 16:14
  Speaker 7: if you're buying a home, you're an investor. But you
• 16:16
  Speaker 7: don't have a plan in place, then you're gonna aid
• 16:19
  Speaker 7: probably make mistakes and worst propulica scenarios, you're gonna fail correct. Right,
• 16:23
  Speaker 7: So this dudes and don't involve right, absolutely? Can you
• 16:26
  Speaker 7: just talk about some dudes and don't in the real
• 16:29
  Speaker 7: estate game.
• 16:29
  Speaker 2: Yeah, there's tons of them.
• 16:30
  Speaker 5: Right, But if you're a first time home by one
• 16:32
  Speaker 5: of the don'ts I tell people is, especially if you're
• 16:35
  Speaker 5: in the application process, you found the house, you're in contract,
• 16:41
  Speaker 5: don't open their debt, don't buy your Mercedes, bends before
• 16:45
  Speaker 5: you go to closing. Don't change your jobs, you know,
• 16:48
  Speaker 5: don't do something that would impact you in a negative
• 16:51
  Speaker 5: way to turn your approval to a decline. Right, And
• 16:55
  Speaker 5: most people you think is common sense, right, but common
• 16:58
  Speaker 5: sense is not common Unfortunately they're not.
• 17:01
  Speaker 4: It's true most people, like they don't realize, like when
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  Speaker 5: Now they don't realize when you go for a car,
• 17:09
  Speaker 5: they may pull your credit. What ten other banks to shop.
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  Speaker 3: This episode is brought to you by P and C Bank.
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  Speaker 5: What's the best deal for for the auto finance company,
• 20:06
  Speaker 5: not for you.
• 20:08
  Speaker 2: As the consumer. Right now, that school and it affects
• 20:10
  Speaker 2: your credit card brings you down.
• 20:12
  Speaker 5: I mean, I've had situations where people applied and purchase
• 20:15
  Speaker 5: Mercedes Benz a week before closing. I've had people who
• 20:18
  Speaker 5: got cold credit cards just because it was colds box involved.
• 20:24
  Speaker 5: You know what I'm saying, Well, I'm like, what are
• 20:26
  Speaker 5: you doing? You couldn't wait to get the bed chees
• 20:28
  Speaker 5: the house yet, so you don't. What I try to
• 20:31
  Speaker 5: tell people is this, when you're in contract, you don't
• 20:35
  Speaker 5: own that house just because you're in contract, just because
• 20:37
  Speaker 5: you have a loan commitment.
• 20:39
  Speaker 2: Do not get happy.
• 20:40
  Speaker 5: Do not make any changes that can affect you in
• 20:42
  Speaker 5: a negative way, because you can get declined just as
• 20:45
  Speaker 5: quick as you got to prove right and The underwriters
• 20:48
  Speaker 5: are always looking for a reason to decline you, so
• 20:51
  Speaker 5: you have to be squeaky clean. Don't be moving money around.
• 20:54
  Speaker 5: That's another big thing. Do not move money around. Keep
• 20:57
  Speaker 5: your money in one account. Stop doing your so suits
• 20:59
  Speaker 5: and putting here and doing this and doing that.
• 21:02
  Speaker 2: You know what I'm saying, don't do it. Don't put
• 21:04
  Speaker 2: the Mattress money in there.
• 21:05
  Speaker 5: No, like, leave your accounts alone, because now we start
• 21:09
  Speaker 5: seeing money moving around. That's red flags. Now we have
• 21:12
  Speaker 5: to document. We have to see where this money is
• 21:14
  Speaker 5: coming from.
• 21:14
  Speaker 2: If you can't document that money, then we can't use
• 21:17
  Speaker 2: it right, and that can blow up your deal too.
• 21:19
  Speaker 5: So the don'ts is it's just keep still, you know what,
• 21:24
  Speaker 5: Keep still, relaxed. You're almost at the closing table, and
• 21:27
  Speaker 5: when you close, you can do whatever the hell you
• 21:29
  Speaker 5: want to do.
• 21:30
  Speaker 2: Right.
• 21:31
  Speaker 5: Another one of the don'ts I would say for first
• 21:34
  Speaker 5: time investors right, stop thinking you don't need money.
• 21:38
  Speaker 2: You need money, right.
• 21:39
  Speaker 5: If you're looking to wholesale real estate, then maybe you
• 21:42
  Speaker 5: don't need money right because you're signing contracts. But if
• 21:45
  Speaker 5: you're looking to do buy and flips, or if you're
• 21:47
  Speaker 5: looking to do buy and holds, you're gonna need capital, right,
• 21:50
  Speaker 5: There's many ways you can get capital.
• 21:52
  Speaker 2: I mean you spoke about it at my workshop.
• 21:54
  Speaker 5: You can do self directed iraise, you can borrow from
• 21:57
  Speaker 5: your four one K, you can you can raise capital
• 22:00
  Speaker 5: with a group of friends.
• 22:02
  Speaker 2: What I'm starting to see right now is becoming more popular.
• 22:05
  Speaker 5: But people are co owning properties together, you know, moving
• 22:07
  Speaker 5: into multi families, working together. You know a lot of
• 22:10
  Speaker 5: different cultures co own right.
• 22:12
  Speaker 6: But can you talk about that collaboration because I'm talking
• 22:15
  Speaker 6: about collaboration in business absolutely, actually last week so now,
• 22:18
  Speaker 6: but collaboration and real estate, Yeah, something that is very key,
• 22:23
  Speaker 6: very important leverage.
• 22:24
  Speaker 7: Can you just talk about that?
• 22:25
  Speaker 2: Yeah?
• 22:26
  Speaker 5: Absolutely. Our collaboration is greater than competition. I speak about
• 22:29
  Speaker 5: this often. That's why we're here right now, because we're
• 22:33
  Speaker 5: collaborating because it doesn't make sense to compete when we
• 22:35
  Speaker 5: all have something that we could bring to the table.
• 22:37
  Speaker 5: So if your first time home buyer, let's just say
• 22:40
  Speaker 5: your brother is a first time home buy and you
• 22:42
  Speaker 5: both want to be in that same area, why go
• 22:44
  Speaker 5: buy two single families? Why not go buy a full
• 22:46
  Speaker 5: family together, live on each floor, and now you have
• 22:48
  Speaker 5: two rental incomes, and now you both can probably live
• 22:51
  Speaker 5: for free or pay minimum together.
• 22:53
  Speaker 2: Now you can split that equity when it's time to sell.
• 22:56
  Speaker 5: Or buy each other out. With real estate investing, you
• 22:59
  Speaker 5: don't need to be one hundred percent owner. I think
• 23:01
  Speaker 5: that's the biggest misconception that people think, Like, if you're
• 23:04
  Speaker 5: going to we all can. We can collaborate and create
• 23:07
  Speaker 5: a business structure, a joint venture business structure and put
• 23:12
  Speaker 5: our money up and it doesn't have to be equal, right,
• 23:15
  Speaker 5: as long as it's equals to one hundred percent at
• 23:17
  Speaker 5: the end of the day, that's all that matters. You
• 23:18
  Speaker 5: can be eighty percent owner. We can both have ten
• 23:20
  Speaker 5: percent ownership, right because we're bringing something to the table,
• 23:23
  Speaker 5: But that would be our portion of the net rental
• 23:27
  Speaker 5: income or of the proceeds after sale ten percent, ten percent,
• 23:31
  Speaker 5: eighty percent of you because you're bringing the capital, right,
• 23:34
  Speaker 5: But we may be the operators and you don't know
• 23:36
  Speaker 5: how to operate, right. So it's all a matter of
• 23:38
  Speaker 5: what do you bring to the table to collaborate to
• 23:41
  Speaker 5: make yourself valuable for where someone wants to put you
• 23:45
  Speaker 5: included into that business.
• 23:46
  Speaker 2: And you said something important, you said coachally, you're not
• 23:49
  Speaker 2: seeing that happen. No, it doesn't happen a cultures. We
• 23:52
  Speaker 2: have ego.
• 23:52
  Speaker 4: Yeah, from a client base standpoint, what are you seeing
• 23:55
  Speaker 4: out there? Like?
• 23:56
  Speaker 2: Why what's holding us back?
• 23:58
  Speaker 5: We hold ourselves back, you know what I'm saying, Like,
• 24:01
  Speaker 5: we want to be the top shotter, we want to
• 24:03
  Speaker 5: be the this is minds right. We have that ego,
• 24:06
  Speaker 5: that mentality, that fucking sense of entitlement that we deserve
• 24:12
  Speaker 5: everything under the blue sun, which we do. But if
• 24:15
  Speaker 5: you ain't working hard towards and then why you have
• 24:17
  Speaker 5: the sense of entitlement for number one?
• 24:19
  Speaker 2: But I don't know why we don't collaborate more.
• 24:22
  Speaker 5: It's sad that I see a lot of people in
• 24:25
  Speaker 5: our community are not collaborating. But also on the flip side,
• 24:29
  Speaker 5: when I'm starting to notice the trend, especially if you
• 24:32
  Speaker 5: look at you know, what they call black Twitter, black
• 24:34
  Speaker 5: social media, You're starting to see the uplifting. You're starting
• 24:37
  Speaker 5: to see people coming together and starting to do more together.
• 24:39
  Speaker 5: So I think that cycle is going to start getting
• 24:42
  Speaker 5: broke down. From an ownership perspective, I'm starting to see
• 24:46
  Speaker 5: family members now in our community buying homes together, you know,
• 24:50
  Speaker 5: living in the homes together. You know you don't need
• 24:52
  Speaker 5: you know, to have a five thousand square foot home
• 24:55
  Speaker 5: and it's just you and your girlfriend right now. If
• 24:58
  Speaker 5: you and your girlfriend the pan it's can all move
• 25:00
  Speaker 5: in even if you want to get the single feeling, right,
• 25:03
  Speaker 5: you know what, we splitting that mortgage four ways. Now
• 25:05
  Speaker 5: it's more affordable and now we're able to save more
• 25:07
  Speaker 5: and invest together.
• 25:09
  Speaker 2: So I think that, I mean, that's a personal story
• 25:10
  Speaker 2: for me. Like that literally is my mouth model right now.
• 25:13
  Speaker 4: Like I own a home with my dad and it's
• 25:16
  Speaker 4: easier for us because obviously it lessons a burden on me,
• 25:19
  Speaker 4: but it also puts me in a position that whereas
• 25:22
  Speaker 4: you know they're older in age, it's easy.
• 25:23
  Speaker 2: For me to take care of absolu.
• 25:24
  Speaker 4: Rather than having them grow in age and having them
• 25:27
  Speaker 4: put them in or having them go into a home,
• 25:30
  Speaker 4: they're here, I can take care of them and it works.
• 25:33
  Speaker 2: No, I think it's I think it's a it's a
• 25:35
  Speaker 2: perfect situation for you to go on. I know someone
• 25:41
  Speaker 2: like myself.
• 25:42
  Speaker 5: When I purchased my first home thirteen fourteen years ago,
• 25:46
  Speaker 5: I didn't want to live with nobody.
• 25:47
  Speaker 2: You kidding me?
• 25:48
  Speaker 5: Forgot to have nobody's going to live with me? Right,
• 25:51
  Speaker 5: But now as I've grown older and not matured. It's
• 25:54
  Speaker 5: more so like, you know what, that's the best way
• 25:56
  Speaker 5: to do it, because people just can't afford to live
• 25:59
  Speaker 5: on their own.
• 26:00
  Speaker 6: No more.
• 26:00
  Speaker 5: People are struggling. People are living paycheck to paycheck. In
• 26:03
  Speaker 5: New York, if you're making one hundred k, you're broke.
• 26:06
  Speaker 5: I'm starting to see a lot more in our community
• 26:08
  Speaker 5: where people are co owned because people just don't they
• 26:11
  Speaker 5: don't have that the resources. You know, we qualify people
• 26:15
  Speaker 5: off your gross income, right, but you live your life
• 26:18
  Speaker 5: off your net income. And if you make one hundred
• 26:20
  Speaker 5: k gross, that's really like fifty five sixty thousand net
• 26:24
  Speaker 5: general state depends depending on taxes and what state you're in, right,
• 26:27
  Speaker 5: But if you're talking about thirty five forty percent, if
• 26:30
  Speaker 5: you're making that type of money, I mean, that's what
• 26:33
  Speaker 5: we're qualify with confie off.
• 26:34
  Speaker 2: That bigger number.
• 26:35
  Speaker 5: So for me, it's like, if you can barely qualify,
• 26:38
  Speaker 5: you're add a max that's a income ratio off of
• 26:41
  Speaker 5: gross income. You really can't afford it because we're not
• 26:44
  Speaker 5: taking consideration your auto insurance, your childcare, you know, things
• 26:49
  Speaker 5: of that nature that don't report on your credit reports.
• 26:52
  Speaker 5: So you have to be smart is what The message
• 26:54
  Speaker 5: that I'm preaching the people now is like, you know, be.
• 26:57
  Speaker 2: Smart about this decision.
• 26:59
  Speaker 5: And that's why I preach your family and invest in
• 27:02
  Speaker 5: as a primary residence versus just buyd a single family
• 27:05
  Speaker 5: home because you you really can't afford it, you know,
• 27:07
  Speaker 5: and you're a recipe for foreclosure. God forigit you get sick,
• 27:11
  Speaker 5: God for bit you get laid off, like how are
• 27:13
  Speaker 5: we going to pay your longage?
• 27:14
  Speaker 6: And one other things before we before we finish that
• 27:17
  Speaker 6: you had mentioned before off camera that it's important to
• 27:20
  Speaker 6: have a strategy. Absolutely people like you go from like
• 27:23
  Speaker 6: two to three to four. Can you just kind of
• 27:24
  Speaker 6: explain that?
• 27:25
  Speaker 5: Yeah, I mean, listen, everything is strategy, no matter your
• 27:29
  Speaker 5: first time, first time home buyer, you buy your second home,
• 27:32
  Speaker 5: move up home, you got to have a strategy.
• 27:34
  Speaker 2: Right for tax purposes, you need a tax strategy.
• 27:37
  Speaker 5: That's why I speak a lot about tax strategy, insurance strategies.
• 27:40
  Speaker 2: We've had that conversation several times.
• 27:43
  Speaker 5: So what I try to tell people go down right
• 27:46
  Speaker 5: four three to one, because if you do it properly,
• 27:51
  Speaker 5: you will be able to use minimum down pay for
• 27:53
  Speaker 5: four units four units, three unit, two units.
• 27:56
  Speaker 6: So the first home should be a four unit home.
• 28:00
  Speaker 6: Then you move out of that, you get the three
• 28:03
  Speaker 6: union home keep. You keep them, but you keep it
• 28:06
  Speaker 6: keeping at the hotel keep. Then you go from three
• 28:08
  Speaker 6: to the two. Yeah, and then now you can buy
• 28:11
  Speaker 6: your dream home. Now you can buy your dreamhol those
• 28:14
  Speaker 6: other holes that's paying for it.
• 28:16
  Speaker 2: You got to think about it, right.
• 28:18
  Speaker 5: You just accumulated probably what's that seven nine none doors
• 28:22
  Speaker 5: in a matter of a couple of years. So if
• 28:24
  Speaker 5: you're making five hundred dollars a profit on door, you know,
• 28:28
  Speaker 5: now your your your single family dream home is paid for.
• 28:32
  Speaker 2: It's really your dream. It's not like this is what
• 28:34
  Speaker 2: I can afford. It's not what I can afford right now.
• 28:36
  Speaker 5: It's like we sacrifice for the first five years of
• 28:39
  Speaker 5: our real estate journey, right and we went multi families
• 28:43
  Speaker 5: and moved our way down and we get it. Strategically,
• 28:46
  Speaker 5: we're not sitting here buying in the best neighborhood when
• 28:49
  Speaker 5: we're buying our multis. We're buying areas that we can
• 28:52
  Speaker 5: feel comfortable and safe and living for a year, and
• 28:54
  Speaker 5: then we're moving out and moving into a little bit
• 28:57
  Speaker 5: step up our neighborhood, but going down the units because
• 28:59
  Speaker 5: from from underwriting perspective, it has to make sense for
• 29:02
  Speaker 5: you moving from one multi family to another multi family.
• 29:06
  Speaker 5: You can't buy a four family and three family on
• 29:09
  Speaker 5: the same block and say I'm moving from one house
• 29:11
  Speaker 5: to another, right, That doesn't make it.
• 29:13
  Speaker 6: So that's to play, like to move to a decent neighborhood,
• 29:16
  Speaker 6: Just keep moving up in neighborhoods, Just keep moving. That's
• 29:17
  Speaker 6: another thing too, parent that're like, I want to move
• 29:19
  Speaker 6: in the best possible neighborhood right away where my kid
• 29:22
  Speaker 6: is like one years old because I went to school district.
• 29:25
  Speaker 2: But one year is not going to make that, right,
• 29:27
  Speaker 2: not at all. It's not going to start to five.
• 29:30
  Speaker 5: Listen, the kid is not going to start the five.
• 29:32
  Speaker 5: I have a four year old, right, and she's she'll
• 29:34
  Speaker 5: be five this year. She's going to kindergarten, right, I
• 29:37
  Speaker 5: actual her every day what you learn in school, and
• 29:41
  Speaker 5: the answer changes every single day, right, and then sometimes
• 29:45
  Speaker 5: it I have nothing to do with school, Like okay.
• 29:48
  Speaker 2: Maybe right, So you got to really think about it.
• 29:50
  Speaker 5: Why are you going to go to that best school
• 29:52
  Speaker 5: district and then the best school district in our areas
• 29:55
  Speaker 5: come with fifteen twenty thousand and property taxes Right now,
• 30:00
  Speaker 5: with the new tax laws, you can only ride off
• 30:02
  Speaker 5: ten thousand. You can't ride on the whole amount. The
• 30:05
  Speaker 5: more so, everything has to be strategy and you have
• 30:08
  Speaker 5: to know your tax laws and you have to keep
• 30:10
  Speaker 5: up with it. Right So why go to that best
• 30:13
  Speaker 5: neighborhood if you really don't need the school district right now?
• 30:15
  Speaker 5: Why don't you go to the okay neighborhood that you're
• 30:18
  Speaker 5: safe in. Get the multifamily because while your child is growing,
• 30:21
  Speaker 5: you could be growing too, but in your real estate portfolio.
• 30:25
  Speaker 5: And now when it's time, maybe I don't even think
• 30:28
  Speaker 5: kindergarten you need to be in the best school district.
• 30:30
  Speaker 5: That's just my opinion. Maybe not even until they get
• 30:32
  Speaker 5: to you know, sixth and seventh grade is when their
• 30:35
  Speaker 5: brains really start retaining stuff. In my opinion is now
• 30:38
  Speaker 5: you probably want to go to that best school district,
• 30:41
  Speaker 5: and then by that time, you probably accumulated you know, three.
• 30:44
  Speaker 2: Four assets that now can help pay for it.
• 30:47
  Speaker 7: It's the same like with people in private school.
• 30:49
  Speaker 6: A lot of time people will send their private kids
• 30:50
  Speaker 6: to private school in like middle school. They could they
• 30:53
  Speaker 6: only pay the price of private school in second grade. Yeah,
• 30:56
  Speaker 6: so they saved, and then by the time they get
• 30:58
  Speaker 6: to like sixth grade seventh grade, now they put their
• 31:01
  Speaker 6: kids in private.
• 31:02
  Speaker 5: Schel and I have folks that love private school, right
• 31:05
  Speaker 5: versus public? Great, But then why you're going to buy
• 31:08
  Speaker 5: the house that comes with fifteen thousand and taxes if
• 31:12
  Speaker 5: you're not gonna send the public because the majority of
• 31:14
  Speaker 5: your taxes are school taxes, you know what I'm saying,
• 31:17
  Speaker 5: So like, why are you going to pay out of
• 31:18
  Speaker 5: the fifteen grand probably ten grand is going to the school,
• 31:21
  Speaker 5: but you're still paying probably ten fifteen k a year
• 31:23
  Speaker 5: in tuition at the same time, So and you can't
• 31:26
  Speaker 5: write it all off no more, So why do it?
• 31:29
  Speaker 2: Right? It doesn't make any sense even if you go.
• 31:30
  Speaker 5: With the Star program. The Star programs are only going
• 31:33
  Speaker 5: to save you a couple of dollars.
• 31:35
  Speaker 2: But those who don't know what's start.
• 31:36
  Speaker 5: Start the Star program saves you on school taxes, right.
• 31:40
  Speaker 5: It used to come off the gross on your taxes.
• 31:44
  Speaker 5: Now they send you a check at the end of
• 31:46
  Speaker 5: the year, So it doesn't really help you doing the
• 31:48
  Speaker 5: cost of the year. You get reimbursed or refunded. That's savings,
• 31:53
  Speaker 5: But that they savings is only like two grands, so
• 31:56
  Speaker 5: I mean two grand versus fifteen grand. It's like pennies
• 31:59
  Speaker 5: on a dollar. When it's a penny saves a penny
• 32:01
  Speaker 5: earned too at the same time, but it doesn't really
• 32:04
  Speaker 5: help you in the grand scheme of things. So what
• 32:07
  Speaker 5: I try to tell people is is and just be
• 32:08
  Speaker 5: smart because you got to pay that mortgage every month,
• 32:11
  Speaker 5: and the mortgage man don't care. They want their money
• 32:14
  Speaker 5: and if they don't get your money, they're gonna wind
• 32:16
  Speaker 5: up foreclosing on you at some point.
• 32:18
  Speaker 2: So just be smart. Move a strategy.
• 32:20
  Speaker 5: Start with rental properties first, because the rental properties can
• 32:23
  Speaker 5: pay for your asset. Like DJ Envy Ncson both say
• 32:26
  Speaker 5: at their seminos, right, which I love that. They say,
• 32:29
  Speaker 5: you know MV splashy like he loves cars, right, we
• 32:31
  Speaker 5: all know that if you follow him, he's always buying
• 32:33
  Speaker 5: some rose Royce or something. But he said, fly it out.
• 32:36
  Speaker 5: I don't buy this unless I have an asset that
• 32:38
  Speaker 5: can pay for it. So I'm not paying for it.
• 32:42
  Speaker 5: I'm paying for the asset assets.
• 32:45
  Speaker 2: Of a reliability.
• 32:46
  Speaker 5: It's right, shameless pot assets of reliabilities people, right, But
• 32:50
  Speaker 5: he's buying the asset to pay for the rose Royce.
• 32:53
  Speaker 5: You know we have that same opportunity. You know these
• 32:56
  Speaker 5: guys are part of the one percent club. Great, we
• 32:59
  Speaker 5: all have that ability to do the same thing. Even
• 33:01
  Speaker 5: if we're not part of the one percent. We can
• 33:03
  Speaker 5: develop the one percent mentality. That's all we need. So
• 33:07
  Speaker 5: that's when you ask me, where do we first start?
• 33:09
  Speaker 5: Right here, the mentality is the first place that we
• 33:12
  Speaker 5: need to start. Develop that one percent mentality. Develop a
• 33:15
  Speaker 5: strong team, develop your one percent dream team. You know
• 33:19
  Speaker 5: you need guys like me, You need guys like Shah.
• 33:21
  Speaker 5: You need financial planning, you need to understand tax planning,
• 33:24
  Speaker 5: you need all of these these these key team players
• 33:28
  Speaker 5: to guide you to know your overall strategy. Because if
• 33:31
  Speaker 5: you just go to in my business, what I like
• 33:33
  Speaker 5: to call them order takers. You know, it's like going
• 33:35
  Speaker 5: to McDonald's. You want fries with that right, if you
• 33:38
  Speaker 5: go to a regular loan office, so they're not asking
• 33:39
  Speaker 5: you questions. They're just thinking to get you preapproved today
• 33:42
  Speaker 5: to buy that house today, but they're not trying to
• 33:45
  Speaker 5: gather the long term your long term goals. So when
• 33:48
  Speaker 5: someone comes to me, I'm asking these questions because I
• 33:50
  Speaker 5: want to know.
• 33:51
  Speaker 2: What, who are you? Number one and what do you
• 33:53
  Speaker 2: want to deal with your life?
• 33:54
  Speaker 5: Because if you tell me, hey, I want to buy
• 33:56
  Speaker 5: this house, but then at the same time you say
• 33:58
  Speaker 5: I want in basketball, you're contradicting your You got to
• 34:01
  Speaker 5: kind of pick your poison and figure out what's the
• 34:03
  Speaker 5: best route. And I can only tell you my opinion,
• 34:06
  Speaker 5: my advice. This is what you qualify for. I'm gonna
• 34:09
  Speaker 5: lead you to the water, but it's up to you
• 34:10
  Speaker 5: to drink. At the end of the day, we want.
• 34:13
  Speaker 6: We want to thank you for coming in. Man, that
• 34:15
  Speaker 6: was I hope you guys really once again took notes. Yeah,
• 34:19
  Speaker 6: I hope you God really took notes. Because this is
• 34:21
  Speaker 6: just like business. You know, real estate is something this
• 34:23
  Speaker 6: is actually probably even more relevant than business because everybody
• 34:26
  Speaker 6: doesn't inspire to be a business owner, but most people
• 34:30
  Speaker 6: have a dream of owning a home right or you know,
• 34:33
  Speaker 6: at least rent you I live somewhere regardless, So even
• 34:36
  Speaker 6: if you're a renter, you should still be educated on
• 34:38
  Speaker 6: it because you know, real estate is something that everybody
• 34:42
  Speaker 6: partakes it well.
• 34:43
  Speaker 2: Even I'm gonna cut your wall.
• 34:44
  Speaker 5: But even if you're a renter, you still should be
• 34:46
  Speaker 5: buying right like why and especially with the millennials, like
• 34:50
  Speaker 5: I hear a lot of this online.
• 34:51
  Speaker 2: Millennials don't want to buy homes.
• 34:53
  Speaker 5: They just want to rent because they don't feel like
• 34:55
  Speaker 5: they want to get tagged and tied down to a property.
• 34:57
  Speaker 5: But why not still invest, you know, still buy property,
• 35:01
  Speaker 5: still buy real estate, and you can because it's nothing
• 35:03
  Speaker 5: wrong with renting. You know, there's a lot of people
• 35:05
  Speaker 5: on my industry that try to say compare rent versus owner,
• 35:08
  Speaker 5: which I get the logic, but there's nothing wrong with
• 35:11
  Speaker 5: being a renter. Right, It's a purpose. You know, some people,
• 35:14
  Speaker 5: you have to be mature to handle home ownership. You know,
• 35:18
  Speaker 5: it's a lot, it's a lot of responsibility. It's it's
• 35:21
  Speaker 5: not just like, oh I bought a house and now
• 35:24
  Speaker 5: I'm a homeowner and great like, but the goddamn ball
• 35:27
  Speaker 5: or break then what right? You know, it's a lot
• 35:29
  Speaker 5: of response to it, and it takes a search maturity
• 35:32
  Speaker 5: to handle home ownership. So if you're not mature enough
• 35:36
  Speaker 5: and you need to rent, why not start investing into
• 35:39
  Speaker 5: real estate and start small.
• 35:40
  Speaker 2: Stay in your lane.
• 35:41
  Speaker 5: You don't have to keep up with, you know, the
• 35:44
  Speaker 5: superstar investors that are out there buying ten properties a week.
• 35:48
  Speaker 5: You know, stay your lane, whether you buy one home
• 35:50
  Speaker 5: a year or one a month, whatever your lane is, staying.
• 35:53
  Speaker 2: This My graduates from my school being.
• 35:59
  Speaker 4: Fulled bad drop bag drop Mike, drop bag, drop bag drops.
• 36:16
  Speaker 1: Coach, the energy out there felt different. What changed for
• 36:18
  Speaker 1: the team today?
• 36:19
  Speaker 2: It was the new game day scratches from the California Lottery.
• 36:22
  Speaker 2: Player is everything. Those games sent the team's energy through
• 36:25
  Speaker 2: the roof.
• 36:25
  Speaker 1: Are you saying it was the off field play that
• 36:27
  Speaker 1: made the difference on the field.
• 36:28
  Speaker 2: Hey, little play makes your day, and today it made
• 36:31
  Speaker 2: the game.
• 36:32
  Speaker 7: That's all for now, Coach.
• 36:33
  Speaker 1: One more question played the new Los Angeles Chargers, San
• 36:36
  Speaker 1: Francisco forty nine Ers and Los Angeles Rams scratchers from
• 36:39
  Speaker 1: the California Lottery.
• 36:40
  Speaker 6: A little play can make your day.
• 36:43
  Speaker 3: Peace, Pay responsibly.
• 36:43
  Speaker 1: It must be eighteen years or older to purchase plate
• 36:45
  Speaker 1: or claim