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Home Ownership: The #1 Way to Build Wealth · Money And Wealth With John Hope Bryant

0:00
Speaker 1: Welcome The Money and Wealth with John O'Bryant, a production
0:03
Speaker 1: of the Black Effect Podcast Network and iHeartRadio. Hey, Hey,
0:15
Speaker 1: this is John O'Briant and this is the Money in
0:17
Speaker 1: Wealth podcast and we're going to break some serious myths today.
0:23
Speaker 1: On this episode, we're going to deal with an issue
0:29
Speaker 1: that I thought was settled and the data would suggest,
0:34
Speaker 1: and my conversations with people as I go around the
0:37
Speaker 1: country and around the cities and neighborhoods would suggest this
0:44
Speaker 1: is more than not settled. How do you build wealth
0:48
Speaker 1: in America? What's the number one way? Maybe more simply,
0:52
Speaker 1: should you become a homeowner? Should you be a homeowner?
0:58
Speaker 1: A lot of folks, to my surprise, particularly a lot
1:01
Speaker 1: of young people, have said the answer to that is no.
1:05
Speaker 1: They don't want to be a homeowner. They've been told
1:09
Speaker 1: by the so called wealthy and so called successful that
1:13
Speaker 1: they shouldn't be. Don't waste your time, don't waste your money,
1:17
Speaker 1: people tell them. The title for this episode is home
1:23
Speaker 1: ownership the number one way you build wealth in America
1:28
Speaker 1: and how you can start right now. More so, I'm
1:32
Speaker 1: gonna get into why you should start right now and
1:36
Speaker 1: what are the steps to starting right now, We're gonna
1:39
Speaker 1: get into this in a very deep way. I'm gonna
1:45
Speaker 1: break this down because everybody tells you to get rich,
1:50
Speaker 1: more so how to be wealthy, which there is a difference,
1:55
Speaker 1: but they don't tell you how, and folks give you
1:58
Speaker 1: a lot of slogans and a lot of messages which
2:01
Speaker 1: you're wrong. And worse, some people are actually lying to you.
2:05
Speaker 1: I have not quite figured out why they're lying to you,
2:10
Speaker 1: although reads probably one of the motivations to turn everybody
2:16
Speaker 1: into renders. That's another topic for another time. One could
2:20
Speaker 1: argue that somebody has a plan that within five years
2:26
Speaker 1: or so, that sixty percent of everything in this country
2:30
Speaker 1: or more should just be rented, and people are just
2:34
Speaker 1: paying for the experience, whether it's renting a vacation, or
2:38
Speaker 1: renting a night out, a overnight stay, or renting a car,
2:45
Speaker 1: or renting where you live. I'm not making a value
2:47
Speaker 1: judgment here. But here's the problem with this argument that
2:53
Speaker 1: is being made. I'm not arguing with whether I mean
2:55
Speaker 1: I'm a landlord. I built one of the largest portfolio
3:01
Speaker 1: of rental home ownership or rental property, single family rental
3:04
Speaker 1: properties by a person of color in the country. So
3:08
Speaker 1: the company about three years ago, embedded in a lot
3:12
Speaker 1: of financial literacy and a rental owned program by the
3:14
Speaker 1: way into the model. But that's sent aside. So I'm
3:18
Speaker 1: a landlord, why would I want you to rent? I'm
3:22
Speaker 1: about to do another business venture in real estate around
3:25
Speaker 1: a multi family while when I want you to rent
3:27
Speaker 1: because I want you ultimately to be free. Everybody coming
3:32
Speaker 1: up probably worked at McDonald's or someplace like that convenience store,
3:36
Speaker 1: faster restaurant. But that doesn't mean unless you just love
3:38
Speaker 1: that industry you should stay there forever. Here's what I
3:44
Speaker 1: find odd about. So the world should be a sort
3:47
Speaker 1: of a stair step, right, so you rent until you
3:49
Speaker 1: can afford to own. But you find really odd, first
3:51
Speaker 1: of all, about the folks telling you not to own
3:55
Speaker 1: a home. If you look on television to all the
3:57
Speaker 1: talking heads telling you out to own a home, do
4:02
Speaker 1: a little research and you'll find that every one of
4:05
Speaker 1: them owns a home. I'm just laughing because the extreme
4:11
Speaker 1: irony of this, it's almost just purely insulting. Actually, everybody
4:18
Speaker 1: telling young people and strolling people and poor people and
4:22
Speaker 1: even middle class people that they shouldn't own a home. Well,
4:28
Speaker 1: those people overwhelmingly ninety nine point nine percent of them
4:34
Speaker 1: own a home. Here's the simple fact. Renting keeps you broke.
4:43
Speaker 1: Ownership owning starts that climb. Median net worth of renters
4:48
Speaker 1: in this country in America. I know the podcast is global,
4:52
Speaker 1: but I'm going to deal with America here first, and
4:54
Speaker 1: then you can extrapulate this data to other developed countries
4:58
Speaker 1: because a lot of this data is similar. Median net
5:03
Speaker 1: worth of renters in America sixty three hundred dollars, median
5:08
Speaker 1: net worth of a homeowner in America, hold on your
5:11
Speaker 1: boots two hundred and fifty five thousand dollars. Homeownership gap.
5:20
Speaker 1: Forty four percent of Blacks Americans African Americans own a home,
5:25
Speaker 1: give or take, compared to seventy two to seventy five
5:28
Speaker 1: percent of their white counterparts. And this is not because
5:33
Speaker 1: people who are of a different hue take a different
5:37
Speaker 1: intellectual queue. As my friend Michael Milkin would say, intelligence
5:43
Speaker 1: is equally distributed, but opportunity is not. So a lot
5:48
Speaker 1: of the wealth gap in this country. If you look
5:51
Speaker 1: at black and white as the bookends of wealth disparity,
5:56
Speaker 1: which I think is pretty fair, a lot of that
5:59
Speaker 1: is captured are not captured in home ownership. Here's a
6:07
Speaker 1: hard truth, a very simple one. The number one way
6:11
Speaker 1: you build wealth in America is home ownership, period, full stop.
6:17
Speaker 1: There are three things that have never gone down in
6:19
Speaker 1: American history. Home ownership values, stock market values, American GDP
6:27
Speaker 1: Gross domestic product, the income of the economic activity of
6:33
Speaker 1: the nation. GDP is about thirty trillion dollars today, probably
6:38
Speaker 1: about a fourth of global GDP. Of all GDP, you
6:45
Speaker 1: can put the top two or three economies inside of
6:50
Speaker 1: a bucket, and put that bucket inside of the American economy.
6:55
Speaker 1: What's the engine of the American economy? Or I tell
7:00
Speaker 1: you stock market. Yes, it busted in the Great Depression,
7:04
Speaker 1: but it came roaring back. Home Ownership has had several
7:10
Speaker 1: burst including the two thousand and eight economic crisis that
7:14
Speaker 1: even I got caught in. I'll explain that in a
7:16
Speaker 1: moment when I tell you my own personal story. And
7:20
Speaker 1: there have been crisis before that, but real estate kept
7:24
Speaker 1: home ownership in particular, kept roaring back. So stock real
7:32
Speaker 1: estate will go up in value. Nothing is guaranteed. It'll
7:36
Speaker 1: hit some wall. There'll be a recession. Okay, it recedes,
7:42
Speaker 1: that's what ress. Recession recedes. That's what that means in
7:47
Speaker 1: layman terms. It recedes, it pulls back as an industry,
7:52
Speaker 1: as a sector in this partic case as relates to value,
7:56
Speaker 1: but then at some point it corrects and resets above
8:02
Speaker 1: the line. I repeat that the country's real estate home ownership.
8:07
Speaker 1: Think about the Texas real estate that you could almost
8:09
Speaker 1: give away twenty five years ago, twenty years ago, something
8:17
Speaker 1: like that. Think about Detroit right across the street from Canada,
8:23
Speaker 1: right on the water, here's a dollar for a house.
8:28
Speaker 1: Think about all these places out Las Vegas where people
8:33
Speaker 1: like it's over, it's done. Miami. They came roaring back,
8:40
Speaker 1: oftentimes eclipsing former valuations of that same house. They go
8:46
Speaker 1: up in value, they receide. Poor people sell on the dip,
8:50
Speaker 1: by the way, lack of financial literacy, lack of confidence,
8:54
Speaker 1: and then the real estate recovers in time above the line.
8:59
Speaker 1: Let me tell you my own personal story, because I
9:01
Speaker 1: think it might resonate with you. I'm going to tell
9:06
Speaker 1: you the most recent story first and then go backwards.
9:12
Speaker 1: So not the seven hundred homes that I owned through
9:16
Speaker 1: a company I sold the Promise Homes Company. I'm still
9:20
Speaker 1: a shareholder, but I'm like a limited partner. Somebody else
9:22
Speaker 1: owns it and runs it in the last three and
9:25
Speaker 1: a half years, but I built that company from zero
9:29
Speaker 1: to about one hundred and fifty million dollars of market value.
9:35
Speaker 1: Before that, I had one house, and before that I
9:41
Speaker 1: had a small condo townhouse. I also owned a three
9:48
Speaker 1: unit apartment building that my father stayed in in dignity
9:53
Speaker 1: the last years of his life. But let's stay focused
9:56
Speaker 1: right now on my condo townhouse. I bought the condo
9:58
Speaker 1: townhouse two thousand and six ish, I believe that's the date.
10:08
Speaker 1: The date ranges, but around that time, right before the
10:11
Speaker 1: economic crisis, I paid about two hundred and twenty thousand
10:15
Speaker 1: dollars for it. As I recall, it's about fifteen hundred
10:19
Speaker 1: square feet seven one two two Lati Heir Boulevard. You
10:22
Speaker 1: can look it up. It's worth over a million dollars today,
10:25
Speaker 1: I'm told. But anyway, I bought it for two hundred
10:29
Speaker 1: and twenty thousand dollars. It was fifteen hundred square feet
10:33
Speaker 1: and I lived there and there. Recession hit, the economic
10:38
Speaker 1: crisis hit in two thousand and eight, the mortgage crisis,
10:45
Speaker 1: and all of my friends, let me insert my broke friends.
10:49
Speaker 1: They meant, well, but it is what they didn't know
10:51
Speaker 1: that they didn't know that was killing them, but they
10:52
Speaker 1: thought they knew. Always consider the source for your advice
10:55
Speaker 1: if you're going to take it. People can love you
10:57
Speaker 1: and give you bad advice, or they can manipulate you
11:02
Speaker 1: and give you the advice that benefits them. To rationalizes,
11:05
Speaker 1: to tell rational lies. So my broke friends were saying,
11:10
Speaker 1: sell sell, sell rices are going down. When I tell you,
11:13
Speaker 1: poor people sell on the dip. Warren Buffett once said,
11:17
Speaker 1: if people are greedy, be afraid. If people are afraid,
11:22
Speaker 1: be greedy. So people were afraid, and all of my
11:28
Speaker 1: friends quotation mark were telling me to sell. I thought, rationally, well,
11:32
Speaker 1: I got to live somewhere. Why would I sell the
11:35
Speaker 1: place I'm I own? Like, okay, the values are not
11:38
Speaker 1: what I want them to be. You know that can
11:41
Speaker 1: self correct. But I live in this place, so I'll
11:45
Speaker 1: just stay here and ignore the praise value. The praise
11:49
Speaker 1: value had dropped into the ones. I think it was
11:52
Speaker 1: about one sixty or so, one sixty one seventy one eighty.
11:56
Speaker 1: I bought it for two twenty. Ignored the noise. That's
12:02
Speaker 1: one of my habits. By the way, one of my
12:03
Speaker 1: success hacks is to just ignore the noise in my
12:07
Speaker 1: life and around me. I mean, just walk through life
12:11
Speaker 1: constantly oblivious to most things around me because it just
12:14
Speaker 1: doesn't matter. I am encouraged about two thousand and nine
12:20
Speaker 1: by my mentor, Ambassador Andrew Young and one of his friends,
12:23
Speaker 1: Sam Bacote, to move to Atlanta for a range of reasons.
12:29
Speaker 1: I decided to take them up in their offer because
12:31
Speaker 1: Ambassador Young was my absolute hero, still is to this
12:34
Speaker 1: day my role model, and he sort of took over
12:37
Speaker 1: the road from Reverend doctor Cecilship Murray in Los Angeles
12:42
Speaker 1: of raising me as an adult, mentoring me into leadership.
12:47
Speaker 1: So I moved to Atlanta, find a place there and
12:52
Speaker 1: buy it and rent out my LA condo townhouse to
12:57
Speaker 1: a LAPD police officer who didn't pay rent on time,
13:01
Speaker 1: I might add, but as long as he paid rent,
13:05
Speaker 1: that was fine, and I had to cough up the
13:07
Speaker 1: property tax payment once a year when that came due,
13:12
Speaker 1: but other than that everything was covered. The mortgage was covered,
13:16
Speaker 1: in fact, most of the property taxes were covered. Also
13:20
Speaker 1: the small out of my pocket for me forgot about it.
13:24
Speaker 1: So two thousand and nine goes By twenty ten, goes
13:27
Speaker 1: By twenty eleven, goes By twenty twelve, goes By. I
13:31
Speaker 1: would have to chase the guy every now and then
13:32
Speaker 1: for rent, but he always pays. Oh eventually, I always pay.
13:37
Speaker 1: My mortgage credit score is great. Minor changes of you know,
13:42
Speaker 1: there's a fosces that goes bad, or a toilet that
13:46
Speaker 1: needs unplugging, you know, unclogging or something. But keep in mind,
13:49
Speaker 1: by the way, no one washes rental cars. So when
13:51
Speaker 1: you own a house or own a property, you're gonna
13:54
Speaker 1: be stuck with the maintenance bill. But that's fine. You
13:57
Speaker 1: also get all the benefits of home ownership, which I'm
13:59
Speaker 1: gonna get to in a moment again, follow the story.
14:02
Speaker 1: So I pay these maintenance things. I'm paying property taxes,
14:05
Speaker 1: he's paying me rent. It all sort of basically evens out.
14:08
Speaker 1: I didn't really make much money, any much money net
14:11
Speaker 1: net net on cash flow. But you know, this is
14:14
Speaker 1: my asset and I own it, it's in my name,
14:16
Speaker 1: and I believe in real estate a long term, so
14:20
Speaker 1: I just kept it. So now I was twenty thirteen,
14:24
Speaker 1: twenty fourteen, twenty fifteen, and twenty sixteen, and around this
14:28
Speaker 1: time me and the family decided we wanted to switch
14:34
Speaker 1: up from the house I was staying in in Atlanta.
14:37
Speaker 1: I'd bought a house in Atlanta and wanted to buy
14:41
Speaker 1: a family home. And this family home needed a lot
14:47
Speaker 1: of work. It was owned by a famous celebrity but
14:53
Speaker 1: had been abandoned for years. The infrastructure was solid, the
14:56
Speaker 1: bones of it were solid, but it needed a lot
14:59
Speaker 1: of help. And we bought the house. Well, we wanted
15:04
Speaker 1: to buy the house, but it was seven hundred and
15:07
Speaker 1: fifty thousand dollars in twenty sixteen ish. Try to figure
15:14
Speaker 1: out how to you know, buy this house. I wanted
15:20
Speaker 1: to keep the home I was staying in at that
15:23
Speaker 1: point in Atlanta. So I called a broker in my
15:28
Speaker 1: Morris broker, African American man Daniel Lowe, who at some
15:31
Speaker 1: point I have on this podcast. I call him, Hey, Daniel,
15:34
Speaker 1: what do you I can sell that condo townhouse for
15:37
Speaker 1: in Los Angeles? Mind your bought it for two twenty
15:41
Speaker 1: last time I checked, the value was one sixty one
15:45
Speaker 1: eighty ish. My friends had told me to sell it.
15:51
Speaker 1: He says, Oh, I can probably get you about seven
15:53
Speaker 1: hundred and fifty thousand dollars. I said, excuse me, what
15:56
Speaker 1: did you say? Can you repeat that again? Is the
15:59
Speaker 1: line gone dead? Here? And I just hear? Did I
16:03
Speaker 1: just hear through an echo? Did you? Did you? Did
16:07
Speaker 1: you say one hundred and fifty thousand dollars seven hundred
16:10
Speaker 1: and fifty thousand dollars. I said, how quickly can you
16:16
Speaker 1: sell this property? He said, I could probably get it
16:18
Speaker 1: so in the month. Excuse me, Yeah, the market is
16:21
Speaker 1: hot for this kind of property. And he's got a
16:23
Speaker 1: great location at Latihera, near the four or five freeway,
16:30
Speaker 1: which was near economic activity. That's why I always tell
16:32
Speaker 1: you near transportation, near economic activity, et cetera, near growth.
16:37
Speaker 1: So I said, sell it, I mean, yeah, sell it
16:41
Speaker 1: for me. So he sell, He lists the property, and
16:44
Speaker 1: within one month, true to form, he sells this property,
16:48
Speaker 1: transfers the money to me. And there's a something called
16:52
Speaker 1: a ten thirty one tax free exchange, which means that
16:56
Speaker 1: you can take the proceeds from a piece of property
16:58
Speaker 1: and sell it into another property, buy another property without
17:04
Speaker 1: any tax hit what soever. Zero. This again, this is
17:08
Speaker 1: the magic of real estate. So I made a capital
17:12
Speaker 1: gain of at least five hundred thousand dollars, which was
17:18
Speaker 1: a huge surprise, and I didn't have to have to
17:22
Speaker 1: pay a dime of taxes on that five hundred thousand
17:25
Speaker 1: dollars net proceeds. Well. Yeah, after I paid the mortgage down,
17:29
Speaker 1: because I shifted that into buying a new property this
17:33
Speaker 1: particular time in Georgia. I then take out a mortgage
17:42
Speaker 1: with a construction loan or rehab loan on the new property.
17:47
Speaker 1: And without telling you too much of my family's business,
17:50
Speaker 1: let's just say that that new property is doing just fine.
17:53
Speaker 1: And I mean like multimillion dollar fine right now. I'm
17:59
Speaker 1: not a genius in that example. I didn't pick up
18:02
Speaker 1: and moved the property in La Tourner the location. I
18:05
Speaker 1: didn't rehabit, and I didn't do any fancy. I just
18:09
Speaker 1: kept it and paid the property taxes and paid the
18:13
Speaker 1: mortgage on time, and made sure I repaired the saint
18:16
Speaker 1: when it ever got clogged. And my upside was a return,
18:22
Speaker 1: that a legal return that rival was anything in almost
18:28
Speaker 1: any business transaction you can imagine, certainly as a passive investment,
18:34
Speaker 1: it was extraordinary. You've got to admit, these numbers are incredible.
18:48
Speaker 1: I called Daniel back, and mind you, the only money
18:52
Speaker 1: was at risk of mine in this situation was the
18:55
Speaker 1: original down payment on the Coundo townhouse for two hundred
19:00
Speaker 1: twenty thousand dollars. Let's just say I put twenty percent
19:03
Speaker 1: cash down. I'm sure I get put ten percent, but
19:06
Speaker 1: let's just say this it was forty percent. That's a
19:08
Speaker 1: maximum forty five ish thousand dollars. Probably it was more
19:13
Speaker 1: like twenty twenty five thousand dollars, and that down payment,
19:18
Speaker 1: along with me paying occasionally some maintenance work over the
19:24
Speaker 1: next eight years or so, facilitated a sale for seven
19:30
Speaker 1: hundred and fifty thousand dollars, most of which was net
19:35
Speaker 1: to me in profit. Think about that twenty to forty
19:40
Speaker 1: thousand dollars translating into twelve x that in profit with
19:47
Speaker 1: no tax bill. That I then rolled into another property,
19:52
Speaker 1: took out again another loan which was tax beneficial. Explain
19:57
Speaker 1: that again in a minute. Were I was also not
20:02
Speaker 1: hit with a tax bill legally, and it went up
20:05
Speaker 1: in value considerably and is now clearly in the seven
20:10
Speaker 1: figure club. So much for somebody saying that owning a
20:15
Speaker 1: home is a bad personal investment. Let's back up now.
20:20
Speaker 1: My mom and dad fought over money, wanted the Samoth
20:27
Speaker 1: Johnny will Smith, wonderful human beings incredible role models in
20:31
Speaker 1: many way, But my dad was finitially illiterate and wouldn't
20:37
Speaker 1: listen to my mother unfortunately, who was a great investor.
20:42
Speaker 1: That together they would have been excellent if one made
20:45
Speaker 1: the money and one invested the money, one used their
20:47
Speaker 1: income to invest in, one use their the other use
20:49
Speaker 1: their income just to pay the household bills. But they didn't, unfortunately,
20:53
Speaker 1: get along like that. We owned in spite of their
21:00
Speaker 1: frustrations with each other. We owned a gas station at
21:02
Speaker 1: Vernon in western South East Corner still the end to
21:08
Speaker 1: this day. We owned an eight unit apartment building on
21:12
Speaker 1: Santa Barbara Boulevard now called Martin the King Boulevard. We
21:15
Speaker 1: owned our own home on that same street. We owned
21:19
Speaker 1: a nursery business, a semi at contracting business. The apartment
21:24
Speaker 1: building we bought for eighteen thousand dollars give or take
21:27
Speaker 1: an eight unit apartment building. We would live in one
21:30
Speaker 1: unit and the rest was profit. We bought this unit
21:34
Speaker 1: for eighteen thousand dollars in Los Angeles. Last time I checked,
21:39
Speaker 1: it was worth eight million dollars. We lost it all.
21:46
Speaker 1: You could make the mortgage payment on that eight unit
21:50
Speaker 1: apartment building from rent from two of the eight units.
21:54
Speaker 1: We lost it all. Now, my dad was a hustler,
21:58
Speaker 1: he was a businessman. The difference between a hustler and
22:01
Speaker 1: a businessman, by the way, or a business woman, is paperwork.
22:05
Speaker 1: My dad did not want to do and bother with paperwork.
22:11
Speaker 1: Financially illiterate. They argue, they fought domestic abuse number one
22:17
Speaker 1: costs from divorces. Money that were costs to domestic abuses. Money.
22:21
Speaker 1: They fight, they go their separate ways. My mother is
22:24
Speaker 1: California's the community property state. She could have taken it
22:27
Speaker 1: for everything he had, particularly she had the kids with her.
22:31
Speaker 1: What a decent, amazing woman. She just left with the
22:34
Speaker 1: literally closed her back and her two kids. One kid
22:37
Speaker 1: had gone to the military. There's a reason they got
22:41
Speaker 1: into a fight in the first place was my dad
22:43
Speaker 1: took the four thousand dollars my mother saved, and he
22:45
Speaker 1: wanted to go on some fancy new idea of his.
22:48
Speaker 1: And she was trying to send my brother to a
22:50
Speaker 1: college of his choice so he could be anything he wanted.
22:52
Speaker 1: But when my dad did that, my brother, Donny Dave
22:56
Speaker 1: Daniel Harris, Donny had to go into the military or
22:58
Speaker 1: get a four year education. Okay, it's another podcast for
23:01
Speaker 1: another day. But my mother then went to go live
23:05
Speaker 1: with a girlfriend because well, she wanted financial freedom on
23:11
Speaker 1: her own terms. So now my dad has all these assets.
23:13
Speaker 1: Now he's got the apartment, take power, financial literacy. He
23:16
Speaker 1: has a home, he has a eight en apartment building,
23:19
Speaker 1: he has the gas station. Then he's got these other
23:22
Speaker 1: businesses in the semen contracting business. So hold that. Okay,
23:29
Speaker 1: park that for a minute. My mother has nothing works
23:33
Speaker 1: in an hourly job, a McDonald's aircraft and boring aircraft.
23:36
Speaker 1: So having the real estate's not enough. You need financial literacy.
23:39
Speaker 1: You need you need to you need paperwork. You need
23:42
Speaker 1: to understand how this system works. You need understand how
23:45
Speaker 1: the tax system works. The entire taxism in America is
23:48
Speaker 1: designed to support home ownership. Hello mortgages. When you get
23:55
Speaker 1: a thirty year mortgage on a home, twenty of that
23:59
Speaker 1: thirty years on average, twenty years of that thirty year
24:02
Speaker 1: mortgage is tax deductible. You write it off. You get
24:05
Speaker 1: the money back all apart in a tax refund on
24:09
Speaker 1: your tax as long as you itemize your tax, your
24:12
Speaker 1: tax returns, check your tax pro on this. Don't just
24:15
Speaker 1: listen to me. You get the value of depreciation. If
24:21
Speaker 1: it's an investment property, you write that off, you get
24:23
Speaker 1: the value of appreciation. I've already described that. That's when
24:27
Speaker 1: the value goes probably goes up in value, and you
24:29
Speaker 1: pay no taxes on that. But check me the tax
24:32
Speaker 1: pro if you do a tax a ten to thirty
24:33
Speaker 1: one tax free exchange, if you're married and you file
24:38
Speaker 1: tax returns together, it's as much less might check as
24:41
Speaker 1: a half a million dollars in free equity when you
24:45
Speaker 1: sell that house, not a tax exchange. Sell the house
24:48
Speaker 1: a half a million dollars of free capital gains capital
24:52
Speaker 1: gains tax capital gains. That's different from W two incompaies,
24:57
Speaker 1: which is around your payroll. Okay, capital gains is what
25:01
Speaker 1: it sounds like. Capital gains when you can do capital
25:04
Speaker 1: gains on stock. Okay, capital gains on a business you
25:08
Speaker 1: sell it, capital gains on stock, me sell it, capital
25:11
Speaker 1: gains on her home when you sell it. Okay. So
25:15
Speaker 1: my mother goes to live with her girlfriend tells me
25:18
Speaker 1: it's my aunty by the way I go, and and
25:22
Speaker 1: this you know, I'm making a long story short. We
25:25
Speaker 1: had some trauma drama. As I was staying with him,
25:29
Speaker 1: I fall on the porch was swallowing my tongue as
25:33
Speaker 1: choked to death. And Uh, this guy Oc who we
25:36
Speaker 1: lived with, who had a I don't owner he owned
25:39
Speaker 1: the house or he rendered it, but he took care
25:41
Speaker 1: of the house with his girlfriend who was my was
25:42
Speaker 1: my mother's friend, and he should have sent out with
25:46
Speaker 1: my mother and said, look, I can't afford to take
25:48
Speaker 1: care take care of your family and mine. Can we
25:49
Speaker 1: have a family meeting once a week. Can we talk
25:51
Speaker 1: about the money, split the bills. You pay this bill,
25:54
Speaker 1: we pay that one. That's what my mother would have done,
25:56
Speaker 1: but no one ever asked her to help. My OC
25:59
Speaker 1: decide to just go. You know, he's got a full
26:02
Speaker 1: time job, but he decides to go around the corner
26:04
Speaker 1: cellth marijuana. Anyway, I saw him murder in front of
26:07
Speaker 1: me by the drug dealers for whom this was his
26:09
Speaker 1: real territory. I'm getting doing the story really quickly, because
26:12
Speaker 1: this is not about my story. This is about owning
26:14
Speaker 1: the home and why it's important how to do it.
26:17
Speaker 1: So my mother gets earns enough money, saves enough money
26:19
Speaker 1: from living with her girlfriend. And this gentleman who unfortunately
26:24
Speaker 1: lost his life because he over money, and I saw
26:29
Speaker 1: it all as a young boys. They was six ish
26:32
Speaker 1: and my mother buys a house in our first our
26:35
Speaker 1: first home in one five five oho too, South Freyley. Essentially,
26:38
Speaker 1: when you buy a house, you remember the address. She
26:42
Speaker 1: buys this, our first home in one five five oh
26:44
Speaker 1: too South Freyley, without anybody's help, got a credit score
26:47
Speaker 1: up right, and got a job, and it had saved
26:50
Speaker 1: a down payment. She buys his house, Moda's house was
26:55
Speaker 1: beautiful in Comple, California, and me and you mean, I
26:59
Speaker 1: tell you my dad was balling. Now, so now let's
27:02
Speaker 1: fast forward. At the end of the day, my mother
27:06
Speaker 1: buys and sales seven homes, helps my sister buy a
27:11
Speaker 1: house twice with the down payment, helped my brother buy
27:14
Speaker 1: a house with the down payment. She's working an hourly
27:18
Speaker 1: job now. He has a credit score of over eight
27:20
Speaker 1: fifty back when it went over more than a fifty
27:22
Speaker 1: against capped out of a fifty. Now. She bought all
27:28
Speaker 1: over southern California and lived below her means. When she
27:32
Speaker 1: passed away two years ago, my mother had a net
27:34
Speaker 1: worth of one million dollars. Working an hourly job fifteen
27:39
Speaker 1: to eighteen dollars an hour for thirty two years and
27:42
Speaker 1: McDonald's aircraft now no's Boeing aircraft. My dad lost everything
27:50
Speaker 1: everything I told you about, the house, the eight and
27:53
Speaker 1: the probab building now worth millions and millions of dollars,
27:57
Speaker 1: the liquor store, the store of the gas station, law
28:00
Speaker 1: it all. In fact, I re engaged with my dad
28:06
Speaker 1: as I was hustling as a businessman and my dad
28:09
Speaker 1: was staying with a lady he didn't really like, but
28:12
Speaker 1: she had leverage over him because she owned the house
28:14
Speaker 1: that he stayed in, and so he was sort of,
28:18
Speaker 1: I don't know, it was like a reverse pimping. He
28:19
Speaker 1: was her first. He was a sort of I believe,
28:22
Speaker 1: forced to be her boyfriend because he wasn't attracted to her.
28:27
Speaker 1: It was obvious she wouldn't have She wasn't very attractive
28:29
Speaker 1: in my view, and so I decided that was not
28:36
Speaker 1: the way I wanted my dad to go out. So
28:38
Speaker 1: I offered to buy the property from his lady. She
28:41
Speaker 1: accepted the offers one hundreds some one thousand dollars or something.
28:44
Speaker 1: I bought the house he was staying in. I knocked
28:46
Speaker 1: down three walls. Remember I told you there was a
28:49
Speaker 1: three apartment building that I also sold in la. I
28:51
Speaker 1: walked and knocked down three walls, left one wall up again.
28:54
Speaker 1: Financial literacy. If you leave one wall up, it's not
28:57
Speaker 1: new construction, it's a rehab. Left one wall up. It
29:00
Speaker 1: was zoned R three. My dad thought it was R four,
29:03
Speaker 1: meaning four units. It was our three three units. It
29:06
Speaker 1: was a single family home on a lot zoned R three,
29:09
Speaker 1: which means a very valuable lot. I got a loan
29:12
Speaker 1: from Wells Fargo construction loan from a friend of mine,
29:16
Speaker 1: Tom Swanson there and unfortunately gave my dad the construction
29:22
Speaker 1: loan proceeds and a credit card. And my god did
29:26
Speaker 1: he blowed running that into the ground so badly, mismanaged
29:29
Speaker 1: it so badly. I had to go get a refinance
29:31
Speaker 1: other construction loan. Thank god th market what that point
29:34
Speaker 1: was going up, I'd have been killed financially out at
29:36
Speaker 1: a file bankruptcy. I went back to Wells Fargo. Thank
29:39
Speaker 1: you so much, Tom Swanson, were having empathy on you
29:41
Speaker 1: and grace in your heart. He refinands that dang on
29:45
Speaker 1: construction loan and got me more proceeds to finish that building.
29:50
Speaker 1: And that's why I always tell you never make emotional
29:52
Speaker 1: decisions and don't do crap with family other than getting
29:55
Speaker 1: a hug and some love and money you can afford
29:58
Speaker 1: to lose. I put this lo own in the hands
30:01
Speaker 1: of my dad. I knew he was financially and he
30:04
Speaker 1: literally even though he was a great hustler, and he
30:08
Speaker 1: fulfilled his promise of messing it up. I love my dad.
30:12
Speaker 1: I love love, love, love love. I God rest his soul.
30:15
Speaker 1: But boy did he screw this up and stressed me out.
30:20
Speaker 1: And so again I and I didn't give an I
30:23
Speaker 1: didn't give them that credit card. Again I had to
30:25
Speaker 1: pay It was a six thousand dollars my X card
30:27
Speaker 1: Express balance, and he run up in a month and
30:31
Speaker 1: I had to pay that off. And that was when
30:32
Speaker 1: sixty grand was everything to me. So learned a lot
30:37
Speaker 1: of lessons. Right, business is not emotional, it's not personal,
30:39
Speaker 1: it's business. And and so anyways, that probably also went
30:44
Speaker 1: up in value, didn't go quite as value. It wasn't
30:47
Speaker 1: as much. It didn't go up as as rapidly because
30:51
Speaker 1: I had all that debt on it, because I had
30:53
Speaker 1: to refinence construction a loan twice. My dad lived in
30:56
Speaker 1: one unit. I took red from the other two units
30:58
Speaker 1: that paid the mortgage and so he was live in
31:00
Speaker 1: dignity and rent free as he got older. And think
31:03
Speaker 1: about all the people are going to have parents getting older.
31:05
Speaker 1: You need to be thinking about what I just told you.
31:08
Speaker 1: So anyway, I cleared the decks on the two properties
31:11
Speaker 1: I had in in la Is a third one, but
31:15
Speaker 1: that's another story to that. I cleared the deck of
31:19
Speaker 1: those two, sold them, took the net proceeds and transferred
31:22
Speaker 1: it into Atlanta and the rest as they say, it's history.
31:26
Speaker 1: Let me now come back to some facts. I want
31:30
Speaker 1: you to pay yourself right. I want you to become
31:33
Speaker 1: your own landlord. I want you to be in a
31:36
Speaker 1: situation when nobody kicks you out of your house. They
31:38
Speaker 1: don't have the power to do that. So I remember
31:41
Speaker 1: a brother was I was giving a speech somewhere brothers
31:43
Speaker 1: like John Sorry, talking about home ownership. I don't own
31:46
Speaker 1: the house. The bank owns a house. If you don't
31:50
Speaker 1: pay right, it's crazy. Like, as long as you pay
31:53
Speaker 1: the mortgage on times, the house is yours, right, And
31:56
Speaker 1: yeah there's a loan on it. But there's no billionaire,
31:59
Speaker 1: no multimillionaire, no thousand are no by the way, city,
32:06
Speaker 1: successful city, county, state, or government federal government that didn't
32:10
Speaker 1: do it without good debt. Good debt is tied to
32:14
Speaker 1: something that appreciates. Bad debt is tied to something that depreciates.
32:19
Speaker 1: There are tax benefits to owning a home, mortgage interest deductions,
32:24
Speaker 1: capital gains exclusion. I've discovered. I've covered some of that.
32:30
Speaker 1: It's forced savings account. You know, every mortgage payment builds
32:34
Speaker 1: equity in the house that you have with your name
32:37
Speaker 1: on it. It's generational wealth homes or the number on
32:41
Speaker 1: inheritance passed down in working families. And that's a key
32:45
Speaker 1: phrase now, in working families. All these so called fancy
32:49
Speaker 1: rich people. And I've got somebody in mind who says
32:53
Speaker 1: stupid stuff like this. He lives in Miami. He's very popular.
32:56
Speaker 1: But I don't want name his name. I'm not trying
32:57
Speaker 1: to to demonize him or whatever. But he just gives
32:59
Speaker 1: a bad advice talking about you know, you know, he
33:04
Speaker 1: would never put money in a home, he'd only put
33:07
Speaker 1: money in the business. Well, he's also worth forty million dollars,
33:11
Speaker 1: I mean, so it's just it's crazy. But the average family, right,
33:16
Speaker 1: do you want to rent someplace or do you want
33:18
Speaker 1: to own where you live? It's just a common sense
33:20
Speaker 1: to me, right, And when is a good time to
33:22
Speaker 1: buy a house when you can afford it three percent
33:26
Speaker 1: interest rates? That's not coming back, I don't think in
33:28
Speaker 1: our lifetime, at least not naturally. The government wants to
33:32
Speaker 1: do something because we have a crisis. They can they
33:34
Speaker 1: can make rates artificially low. But rates were increased from
33:41
Speaker 1: again free money one two three percent, which again I think,
33:44
Speaker 1: which is an aberration. It happened during the mortgage crisis,
33:47
Speaker 1: by the way, to a very reasonable five to six percent.
33:51
Speaker 1: That's still very reasonable. I mean when my dad was
33:54
Speaker 1: on the scene, my mother was on the scene, I
33:56
Speaker 1: remember mortgage as being in the teens, like fifteen sixteen.
34:00
Speaker 1: It was crazy. So these are not bad rates. Just
34:03
Speaker 1: get used to it. And if you can afford to
34:07
Speaker 1: own something, just buy it because it's only going to
34:09
Speaker 1: go up in value. Real estate is just going to
34:11
Speaker 1: keep going up. Like, don't let the perfect be the
34:14
Speaker 1: death of the good. Just buy something somewhere. So let
34:19
Speaker 1: me give you some historical context for why you have
34:22
Speaker 1: a wealth disparity. To begin with, you had forty acres
34:27
Speaker 1: and a mule that we know that story, but it
34:30
Speaker 1: was only eighteen thousand families black Union soldiers who got
34:35
Speaker 1: the benefit of forty acres and the mule, and they
34:38
Speaker 1: that benefit was actually was four to one thousand acres
34:41
Speaker 1: divided by eighteen thousand families as a pilot by Abraham
34:45
Speaker 1: Lincoln Secretary of War Standing General Sherman. After the Civil War,
34:49
Speaker 1: unfortunately Lincoln was assassinated and the people who took him
34:52
Speaker 1: took over reversed Field Action fifteen, which was forty acres
34:57
Speaker 1: and a mule. I don't know if you know that
34:59
Speaker 1: it was reversed. So people are talking about black people
35:01
Speaker 1: are lazy, It's just just not true. Right. They gave
35:04
Speaker 1: us this really bad land down the coast. We want
35:07
Speaker 1: beachfront property today, But back in the agricultural age in
35:10
Speaker 1: the eighteen hundreds, the last place you wanted land was
35:13
Speaker 1: on the beach. But we didn't complain about it. In fact,
35:15
Speaker 1: we worked that land so hard in a month, they said,
35:18
Speaker 1: my god, these folks are so industrious. Give them a mule.
35:21
Speaker 1: Forty acres and a mule. The bank came the next month,
35:25
Speaker 1: the Freedman's Bank, which I have the honors of be
35:28
Speaker 1: going to tell you I'm the only American citizen ever
35:31
Speaker 1: to trigger the renaming of a building on the White
35:33
Speaker 1: House campus. It was called the Treasury, anex building for
35:35
Speaker 1: one hundred years. It's now called the Freeman's Bank building
35:38
Speaker 1: next door to my friends Michael Milkins Milkins Center for
35:41
Speaker 1: the Advancement of the American Dream. By the time you
35:43
Speaker 1: listen to this document, this podcast, you'll it'll be open.
35:46
Speaker 1: By the way, m cad should go see it and
35:48
Speaker 1: go visit the Freeman's Bank next door, which was the
35:51
Speaker 1: location that Frederick Douglas sat in where he ran the
35:56
Speaker 1: bank charted to teach free slaves about money Financial Literacy
36:00
Speaker 1: Circle eighteen sixty five. So January was the land, February
36:03
Speaker 1: was the mule, March was the bank. In April, unfortunately,
36:07
Speaker 1: Lincoln was assassinated. The whole dream he had for emancipating
36:12
Speaker 1: and empowering and educating empowering formally enslaved people fell apart,
36:17
Speaker 1: and by eighteen seventy four that bank had failed because
36:20
Speaker 1: white board members of that bank served as destined charted
36:25
Speaker 1: to serve and dominis on the savings of blacks. By
36:28
Speaker 1: the way, it changed the charter of the bank so
36:30
Speaker 1: that they could borrow money and guess who they loan
36:33
Speaker 1: the money. To themselves. Okay, never mind with the history lesson,
36:38
Speaker 1: But that was what that's what happened to the only
36:41
Speaker 1: time that blacks had a chance to get some land
36:43
Speaker 1: after the slavery. Of slavery, it was only fo hundred
36:45
Speaker 1: thousand acres. You might think there's a lot of money.
36:47
Speaker 1: We're about to tell you about two hundred and seventy
36:49
Speaker 1: million acres in a second. So that's that experiment. So
36:53
Speaker 1: eighteen sixty two ish, here comes another act that it
36:59
Speaker 1: was created to give those who are moving west an
37:04
Speaker 1: opportunity to buy land. And that act transferred, the Homestead
37:14
Speaker 1: Act of eighteen sixty two transferred over let's say a
37:19
Speaker 1: decade at by the way, it was forty acres for
37:21
Speaker 1: black people. This was about one hundred and sixty acres
37:24
Speaker 1: each plot, and it transferred two hundred and seventy million acres,
37:30
Speaker 1: not four hundred thousand acres, two hundred and seventy million
37:33
Speaker 1: acres to struggling but enterprising families wanting to go west.
37:41
Speaker 1: Ninety nine point nine percent of those plots were given
37:45
Speaker 1: to whites, and there were government agents put in place
37:50
Speaker 1: across the country to teach those white settlers how to
37:54
Speaker 1: cultivate and work that land. Oddly enough, that land was
37:58
Speaker 1: on was located in places where you can grow crops
38:03
Speaker 1: of that day. It's certainly much better than the beachfront property.
38:08
Speaker 1: It was given a Blacks that by the way, if
38:10
Speaker 1: I didn't mention, it was taken back away from them
38:12
Speaker 1: two years later, after Lincoln was assassinated. It was literally
38:16
Speaker 1: the new president, President Johnson, reversed effectively build actually fifteen
38:23
Speaker 1: and reconstruction, and all that land was given back to
38:27
Speaker 1: the Confederate families that owned it beforehand. Can you imagine
38:31
Speaker 1: the indignity of this. It gets worse though. I'm just
38:35
Speaker 1: trying to explain to you the history, so you didn't
38:37
Speaker 1: get that out of your system and we can move on.
38:39
Speaker 1: If you have to be a personal color was just
38:41
Speaker 1: put your bucket down right now and no more excuses.
38:45
Speaker 1: I'm trying to explain to people who have privileged why
38:47
Speaker 1: you are more than just smart, and those who don't
38:51
Speaker 1: have privilege, why you shouldn't be just irritated. You should
38:55
Speaker 1: be well. Success is a bridge. If you want revenge,
38:59
Speaker 1: success is the best revenge. Just go do something because
39:02
Speaker 1: people today didn't do this to you, right, so just
39:05
Speaker 1: go get therapy for your anger, but move forward with
39:08
Speaker 1: home ownership. But let's be honest about what happened. So
39:13
Speaker 1: the Homestead Act May eighteen sixty two, a lot of
39:18
Speaker 1: people to go go west, and you got one hundred
39:24
Speaker 1: and sixty acres. You had to livered the land for
39:27
Speaker 1: five years, you had to build a dwelling, cultivate the land,
39:32
Speaker 1: and two hundred and seventy million acres, that's ten percent
39:40
Speaker 1: of all American land was given to these families, and
39:44
Speaker 1: most blacks were excluded, like there were like literally a
39:48
Speaker 1: handful of plots given to blacks. So that's a huge,
39:54
Speaker 1: huge wealth creation thing. About one hundred million Americans, mostly white,
39:57
Speaker 1: benefit today from the Homestead Act land. Fast forward now
40:01
Speaker 1: to the government having their turn at screwing over people
40:05
Speaker 1: of color. That was the FHA nineteen well the early
40:11
Speaker 1: twentieth century where they created red lining. It wasn't banks
40:15
Speaker 1: that creator red lining, it was the federal government. They
40:18
Speaker 1: literally said, we are not going to guarantee mortgage loan
40:21
Speaker 1: in these neighborhoods. They're dangerous. Well, guess why they're dangerous
40:24
Speaker 1: because the Freedman's Bank was upended and no one told
40:28
Speaker 1: them free enterprise and capitalism. They were forced to go
40:30
Speaker 1: into urban ghetto areas, and they put all the poverty
40:35
Speaker 1: in one place with no jobs and no economic opportunity,
40:38
Speaker 1: and guess what happened. People will need to live and
40:40
Speaker 1: so they start stealing. Hello, it's sort of common sense.
40:44
Speaker 1: By the way, poor whites did the same thing in
40:46
Speaker 1: more poor whites American than por anybody else. That's a
40:47
Speaker 1: different podcast for a different day. So the government blamed
40:53
Speaker 1: poverty on the poor and told people to bootstep themselves
40:58
Speaker 1: without shoelaces and refuse to ensure a mortgage in a
41:03
Speaker 1: in a so called poor black neighborhood. But guess where
41:06
Speaker 1: they insure the mortgages in a white suburban neighborhood or
41:09
Speaker 1: a suburban neighborhood that happened to be white. Well, we'll
41:12
Speaker 1: guess where the banks wanted to write a mortgage in
41:14
Speaker 1: places where they were insured insurance from the federal government.
41:17
Speaker 1: So we actually wasn't banks that were doing discrimination at
41:20
Speaker 1: that point, it was a federal government. And where did
41:22
Speaker 1: banks not want to write a mortgage in a place
41:25
Speaker 1: that was proceeded to be dangerous where there was no
41:27
Speaker 1: mortgage insurance. And that's why you'll see properties fifteen minutes
41:31
Speaker 1: apart today to this very day, that are literally one
41:34
Speaker 1: hundreds of thousand dollars in difference or more in value.
41:36
Speaker 1: You'll have an underserved area where houses forty hundred thousand
41:40
Speaker 1: dollars of value, and fifteen minutes away you'll have an
41:43
Speaker 1: area where the home is worth three quarters of a million,
41:45
Speaker 1: a million, two million dollars. And this was the root
41:49
Speaker 1: of that. Okay, so those are the fundamental building blocks
41:57
Speaker 1: of sort of why Well, then you have the GI bill.
42:00
Speaker 1: This is a third punch in the nose. Blacks and
42:03
Speaker 1: whites come back from World War Two, and something like
42:07
Speaker 1: ninety two percent of all GI bill allocations went took Caucasians.
42:12
Speaker 1: So a GI bill was a much education as much
42:14
Speaker 1: education can shut down your throat, a skilled education for
42:19
Speaker 1: a job for the future, and a mortgage to buy
42:22
Speaker 1: a new home. And that overwhelmingly went up to also
42:26
Speaker 1: white returning gis and God bless them for their service.
42:28
Speaker 1: They didn't do this, the government did it, but blacks
42:32
Speaker 1: were systematically turned down. Oddly enough, well, that created the
42:37
Speaker 1: modern middle class. So voila. So they say, okay, that,
42:41
Speaker 1: but now we're in a different time, and if you
42:45
Speaker 1: get your credit score up and go to Operation Hope,
42:48
Speaker 1: get your debt down to what we're telling you, get
42:50
Speaker 1: your savings up. Whether you're black or white, or red
42:53
Speaker 1: or blue politics, or you're urban or rural, it doesn't matter.
42:57
Speaker 1: Operation hopeing can help you produce some green in your life.
43:00
Speaker 1: It could help you get access to capital from one
43:02
Speaker 1: of the biggest, most prestigious banks at prime rate today
43:06
Speaker 1: and get you in the seat to own your own home.
43:09
Speaker 1: In fact, a third of those that we serve to day,
43:13
Speaker 1: well I think it's maybe twenty five percent of those
43:15
Speaker 1: we serve today are in rural America. By the way,
43:17
Speaker 1: we're we're serving everybody. We're serving Hispanics, we speak Spanish, Spanish,
43:22
Speaker 1: we're speaking. We're serving certainly black communities, We're serving poor
43:25
Speaker 1: white struggling, We're certain middle class communities. We're all across
43:28
Speaker 1: the country. So now, whoever you are, we're here for you.
43:32
Speaker 1: We have millions of clients and directed four point five
43:34
Speaker 1: billion dollars in prime capital, half of which is that
43:38
Speaker 1: is half of that is for mortgages. In fact, the
43:40
Speaker 1: Fulton Bank, one of our partners, has done one point
43:43
Speaker 1: two billion dollars in home ownership for Black Americas alone.
43:46
Speaker 1: Just in the Pennsylvania I'm sorry, in the yeah, Pennsylvania area.
43:53
Speaker 1: And then we're doing stuff with Wells Fargo and Bank
43:55
Speaker 1: of America and our Home in Side locations and truest
43:58
Speaker 1: Bank where we're seeing real results in getting people access
44:02
Speaker 1: to capital or raising credit score fifty four points in
44:05
Speaker 1: six months, lowering debt thirty eight hundred dollars, increasing savings
44:09
Speaker 1: twelve hundred dollars for somebody making forty eight to fifty
44:12
Speaker 1: thousand dollars a year, given a real shot at home ownership.
44:27
Speaker 1: So it's not about feeling sorry, it's about catching up
44:31
Speaker 1: with a plan. Right, This is a plan for you.
44:34
Speaker 1: So let's now bust some big myths about home ownership.
44:39
Speaker 1: You need twenty percent down, not true. It's nicely a
44:42
Speaker 1: twenty percent down. But there are many many programs from FAHA,
44:46
Speaker 1: oddly enough, the same organization that discriminated against blacks in
44:49
Speaker 1: the early twentieth century. FAHA. You can get three point
44:52
Speaker 1: five percent down payment assistance. You know, it's three point
44:57
Speaker 1: five percent mortgage rate, sorry, and downpayment assistance programs available
45:02
Speaker 1: through them. You can go to an FDIC insurance bank
45:05
Speaker 1: and talking with them about their community reinvestment Act programs
45:08
Speaker 1: and in some cases get a grant from them for
45:11
Speaker 1: ten thousand dollars to help you with a down payment.
45:13
Speaker 1: Did you know that? Yes, Operational coaches can help you
45:16
Speaker 1: with that. Go on your Hope in Hand app on
45:19
Speaker 1: your phone, or call the eight hundred number, or go
45:21
Speaker 1: to our website Operationhope dot org and one of my
45:24
Speaker 1: team members across forty two states will help you help
45:28
Speaker 1: yourself at what fee zero. It's all scholarship for you
45:33
Speaker 1: because we raise the money on your behalf. Okay, here's
45:36
Speaker 1: the myth. Number two. My credit isn't good enough. You
45:40
Speaker 1: may qualify it between five eighty and six twenty. But
45:43
Speaker 1: through one of these government programs, if you're trying to
45:46
Speaker 1: get a market rate prime bank loan, we're gonna get
45:50
Speaker 1: through your credit score up to close to seven hundred.
45:52
Speaker 1: But Operation Hope is doing that. In fact, if you
45:55
Speaker 1: want to be patient, wait twenty four months, we'll get
45:58
Speaker 1: you credit screw up one hundred and twenty points in
46:01
Speaker 1: eighteen to twenty four months, will get up fifty four
46:03
Speaker 1: points and six months on average. So you know, in
46:06
Speaker 1: a world where you think that a lot of things
46:08
Speaker 1: are not in your control, this thing, your credit score.
46:11
Speaker 1: We can. We can move it with your help so considerably,
46:16
Speaker 1: along with getting in your debt ratios down, get your
46:19
Speaker 1: ratios rights to the bank will say yes, and we
46:21
Speaker 1: know the criteria for which the banks will want to
46:24
Speaker 1: say yes. We're the only nonprofit allowed to operate inside
46:26
Speaker 1: of a bank branch in US history. Okay, here's myth
46:29
Speaker 1: number three, and we're in all the major banks. Here's
46:31
Speaker 1: myth number three. I'm not ready to commit. Well, renting
46:35
Speaker 1: is a commitment to someone else's wealth building like mine,
46:40
Speaker 1: So you're already committed. Don't let the perfect be the
46:43
Speaker 1: death of the good. Just get in the game. Myth
46:45
Speaker 1: number four, the market's too high. Well, the right kind
46:49
Speaker 1: of buyas when you are financially ready to do so,
46:51
Speaker 1: not emotionally scared or scarred. There's no right times. It's
46:55
Speaker 1: just right now, right, So just do something. Just do
47:00
Speaker 1: it as soon as you can, because these prices are
47:02
Speaker 1: just going to keep going up. Mith number five, I
47:05
Speaker 1: make too little. There are special programs designed just for you.
47:08
Speaker 1: So as long as you have good credit, a job. Again,
47:11
Speaker 1: remember my mother's story. She worked an hourly job, right
47:15
Speaker 1: and she got prime rates. You'd be surprised I've often
47:19
Speaker 1: found that the worst fears of the ones in your head,
47:22
Speaker 1: like things are very rarely as bad as you think
47:24
Speaker 1: they are. And what's gonna happen? Worst things that happens
47:27
Speaker 1: when you tell you know you hadn't know when you
47:28
Speaker 1: woke up this morning, you're starting with no, you can't
47:31
Speaker 1: fall from the floor. Just try or I mean, just
47:35
Speaker 1: try get in the game. So my hope coaches that
47:39
Speaker 1: operation Ope will help you obtain a mortgage at prime
47:44
Speaker 1: rates and get and back into being being qualified. Here's
47:49
Speaker 1: the step, step by step guide and how to buy
47:51
Speaker 1: a house even if you think you can't right now.
47:54
Speaker 1: Step number one, know your credit score half a black
47:58
Speaker 1: folks ever cord scored below six twenty the bank. It
48:01
Speaker 1: may not be a bank discriminated against you or somebody
48:03
Speaker 1: doesn't like you. It could be just credit your credit score,
48:05
Speaker 1: your credit store stinks, Latino's a little bit above that.
48:08
Speaker 1: And you know you can be white with a five
48:11
Speaker 1: hundred credit score. By the way, the fact the biggest
48:13
Speaker 1: population of poverty this country is poor white, so every
48:16
Speaker 1: is not discriminating this. Everybody's got problems, but you can
48:19
Speaker 1: fix those problems because rainbows only follow storms. So know
48:22
Speaker 1: your credit score. I checked mine once a week on
48:25
Speaker 1: my app, pull it for free. Understand what's holding it down? Okay,
48:31
Speaker 1: and I'm gonna I'll do a separate podcast just on
48:33
Speaker 1: credit score. But basically the number one way you move
48:35
Speaker 1: that credit score is consumer managing your consumer credit debt
48:38
Speaker 1: debt ratios. Ask the coach and Operation Hope when you
48:41
Speaker 1: call them about these where John Brian said, you know
48:44
Speaker 1: consumer credit, credit cards, debt ratios, Like, what do I do?
48:48
Speaker 1: What does that mean? You want to keep your balances,
48:50
Speaker 1: by the way, about thirty percent if you can? When Yeah, okay,
48:55
Speaker 1: I'm gonna get into credit at the moment, I'm trying
48:57
Speaker 1: to get through the mortgage thing. You want to seven
49:00
Speaker 1: underd credit score ideally that's your target, right, And you
49:03
Speaker 1: can check your credit on the Hope Financial Wellness Index online.
49:08
Speaker 1: Go to the search for the Hope Financial Wellness Index.
49:11
Speaker 1: Type in your credit score. Type in your zip code
49:13
Speaker 1: will tell you your credit score. I want to take
49:16
Speaker 1: experience forgiving us the data along with the US government
49:20
Speaker 1: who helped us so to map a rezip code in
49:22
Speaker 1: America by credit score number two budget and say for
49:27
Speaker 1: your down payment right, so three to five percent minimum.
49:31
Speaker 1: Realistically ten percent to twenty percent would be fantastic. But
49:37
Speaker 1: just do something, just get it, just start saving, and
49:40
Speaker 1: then let's figure out what's working with the coach where
49:42
Speaker 1: there's some programs that can help you, right, tax refunds,
49:46
Speaker 1: side hustles and help like the earn Income tax credit
49:51
Speaker 1: that might be as much as twenty thousand dollars to
49:52
Speaker 1: help you with your down payment, as my coaches about that.
49:55
Speaker 1: And cut your subscriptions. All these things you subscribe to
49:57
Speaker 1: and you forget you subscribe to it on your phone.
50:00
Speaker 1: You'd be amazed how much money you can say. But that,
50:02
Speaker 1: and stop smoking cigarette and stuff's gonna kill you anyway.
50:04
Speaker 1: There's a way to save some money or whatever else
50:07
Speaker 1: you're smoking, and what else, And don't go to a
50:13
Speaker 1: coffee shop for a while, buy a curate machine and
50:16
Speaker 1: make your coffee at home. Two ways to make money,
50:18
Speaker 1: make more, spend less, right, so my people can get
50:21
Speaker 1: you on a budget. Number three, get pre approved. It
50:25
Speaker 1: is really important, Like get pre approved. It'll boost your
50:28
Speaker 1: confidence just to get a bank to give you a
50:32
Speaker 1: pre approval letter, not just prequalified, pre approved. Know you're
50:36
Speaker 1: buying power. How much home can you afford to purchase
50:39
Speaker 1: and then you walk into an open house with them
50:43
Speaker 1: knowing that you got the power to say yes. I mean,
50:45
Speaker 1: that's really powerful negotiating to it. When you tell your
50:48
Speaker 1: realtor you already have a not a prequalification letter, a
50:51
Speaker 1: pre approval letter. I just had a family member get
50:54
Speaker 1: that wrong recently, and they had a pre qualification letter
50:57
Speaker 1: and did not convert into a preapproval letter and they're
51:00
Speaker 1: halfway through a transaction and now are having to figure
51:03
Speaker 1: out how to restructure it avoid mortgage scams. Right, that's huge.
51:07
Speaker 1: There's a lot of people trying to separate you from
51:09
Speaker 1: your wallet. Number four. Work with the right real estate agent,
51:12
Speaker 1: someone who advocates for you, not the seller. In my
51:16
Speaker 1: operational people can help you find the right person. Number five.
51:21
Speaker 1: Understand closing process, inspection, appraisal, underwriting, title, insurance, insurance, all
51:33
Speaker 1: the house maintenance is something you're going to deal with next.
51:38
Speaker 1: But these are the things that you want to make
51:41
Speaker 1: sure you get through all these steps and don't shortcut it.
51:44
Speaker 1: You'll end up paying the price for that later if
51:46
Speaker 1: you shortcut. And if you deal with the bank, they're
51:48
Speaker 1: going to make you do this stuff anyway, which is
51:50
Speaker 1: good and you might want to consider having them bake
51:53
Speaker 1: your property tax payments into your mortgage payment. At least
51:57
Speaker 1: look at what that does to your mortgage payment. Don't
51:59
Speaker 1: ask what you never asked what the mortgage payment is.
52:02
Speaker 1: When there's an interest rate attached, we gotta stop being paymentized.
52:05
Speaker 1: What's the payment? What's the payment? Was the payment? It's
52:07
Speaker 1: even bad to do that. When you're buying a car.
52:09
Speaker 1: You want to know what's the interest rate? Was the
52:10
Speaker 1: terms and all that kind of stuff, And you don't
52:13
Speaker 1: want an adjustable rate mortgage. In my opinion, you want
52:15
Speaker 1: to fix rate mortgage. You want to know what your
52:17
Speaker 1: payment is every month. Right, don't panic Your team will
52:23
Speaker 1: you know? My team will guide you this whole process. Right.
52:26
Speaker 1: Number six, celebrate and plan for what's next. Move with purpose, maintenance,
52:34
Speaker 1: equity tracking long have a long term plan, and you
52:38
Speaker 1: can become a multi millionaire in real estate, starting with
52:41
Speaker 1: your own home. Use that equity as a powerful benchmark
52:44
Speaker 1: to invest on a home, invest in your kids' education,
52:47
Speaker 1: use the equity to do a home equity, allowing the
52:48
Speaker 1: credit to buy it another home. Getting ahead of ourselves.
52:51
Speaker 1: So here's a resources most people don't know about when
52:54
Speaker 1: trying to become a homeowner, FHA loans for first time
52:58
Speaker 1: low income buyers, City and county down payment assistance grants
53:04
Speaker 1: all right, CR down payment assistance grants at banks, Community
53:08
Speaker 1: Reinvestment Act. Can asked my coaches about all this stuff.
53:11
Speaker 1: Cr A loan programs, Community Reinvestment Act loan programs at banks,
53:15
Speaker 1: and also at credit unions. Credit unions are a great
53:18
Speaker 1: source of capital. You may not know that, and you
53:20
Speaker 1: may not realize you may qualify to become a member
53:22
Speaker 1: of you of a credit union in your neighborhood. There
53:25
Speaker 1: are low rates and low closing costs. These low these
53:28
Speaker 1: CR loan programs and credit unions. I've got credit Uni
53:31
Speaker 1: accounts for different things. I've actually bought up some cars
53:36
Speaker 1: to credit unions. The incredibly they had the best rates
53:38
Speaker 1: by far. HUT Housing UH counselors. We have HUD approved
53:45
Speaker 1: financial counselors at Opera Show. But you want to make
53:47
Speaker 1: sure that somebody's HUD as in US Housing Urban Development Department,
53:51
Speaker 1: HUT approved, not the Homeboy Shopping Network. So housing counselors
53:55
Speaker 1: for budgeting, planning, Opera Show, homeownership coaches, it's national and
54:00
Speaker 1: it's free support. These are resources available to you that
54:04
Speaker 1: I would recommend homewership. Home Ownership is dignity, it's power,
54:09
Speaker 1: and it's yours to claim right now. So I want
54:14
Speaker 1: you to have a call to action. I want you
54:17
Speaker 1: to have a schedule to become a homeowner, a target date,
54:20
Speaker 1: and work backwards. Don't say one day, say day one.
54:24
Speaker 1: Start the journey today. Don't let the perfect become the
54:26
Speaker 1: death of the good. I want you to share this
54:29
Speaker 1: episode with others. I want you to pack. Go to
54:36
Speaker 1: Opera Shope, download the app and sign up with a
54:38
Speaker 1: whole financial coach. Tell them I send you. They'll give
54:40
Speaker 1: you a thousand dollars coaching scholarship package to start with,
54:43
Speaker 1: so none of our coaching will cost you any money.
54:46
Speaker 1: You get serious about this, or upgrade you to the
54:48
Speaker 1: next level of US coaching scholarship, which I think is
54:51
Speaker 1: valued at five thousand dollars. Again, you to invest your
54:54
Speaker 1: time and energy. Are payoff is seeing you successful. They're
54:58
Speaker 1: going to help you get your credit score up fifty
55:00
Speaker 1: four points in six months, your debt down thirty eight
55:03
Speaker 1: hundred bucks with somebody making forty eight two two thousand dollars,
55:06
Speaker 1: your savings up twelve hundred dollars so the bank can
55:09
Speaker 1: get out of the no business and back into the
55:11
Speaker 1: yes business. At scale. Right, we're in half of Truest branches.
55:16
Speaker 1: We're in Wells Fargo branches. We're in US Bank branches,
55:20
Speaker 1: and Nova's Bank branches, Regions Bank, First, Horizon Bank branches,
55:26
Speaker 1: Santander Bank's I'm starting. I think I mentioned that I
55:31
Speaker 1: mentioned Bank of America. We have child's accounts with City Group.
55:35
Speaker 1: We're supported by JP Morgan Chase in other ways. I mean,
55:40
Speaker 1: it's just so we're easier to tell you what banks
55:43
Speaker 1: we're not in than to tell you what banks we
55:46
Speaker 1: are in, because we're because if it's a well known bank,
55:49
Speaker 1: it's a very bemoharas all these folks, it's a very
55:51
Speaker 1: good chance that we're uh, they're partners. So go to
55:54
Speaker 1: our opertional website or go online to the open hand app.
55:59
Speaker 1: Tell all I sent you. It's John O'Briant. This is
56:01
Speaker 1: money and wealth, and this is the first door to
56:04
Speaker 1: you building wealth. It's home ownership. And tell these people
56:08
Speaker 1: that tell you not to own a home that they're stupid.
56:11
Speaker 1: Not that they're stupid, but they're saying stupid stuff. And
56:14
Speaker 1: you tell them I said it people again. Next time
56:17
Speaker 1: you hear a wealthy person telling you you shouldn't buy
56:20
Speaker 1: a house, look at them in the face and say,
56:22
Speaker 1: don't you own a house? Watch their face just drop
56:27
Speaker 1: all right, Love you, Tell your friends and subscribe to
56:30
Speaker 1: this podcast. I'll see you here this time next week.
56:34
Speaker 1: Get my book Financial Legency. For all I've already said,
56:36
Speaker 1: go to Operation Hope, Love and Light. This is a
56:39
Speaker 1: civil rights movement. The civil rights from civil rights in
56:42
Speaker 1: the streets to silvil rights in the suites. I'me out
57:00
Speaker 1: Money and Wealth with John O'Brien is a production of
57:03
Speaker 1: the Black Effect Podcast Network. For more podcasts from the
57:06
Speaker 1: Black Effect Podcast Network, visit the iHeartRadio app, Apple Podcasts,
57:11
Speaker 1: or wherever you listen to your favorite shows.