ATHLLC7716161235

00:00:00.000 | (upbeat music)

00:00:01.780 | - Hello, and welcome to another episode of All The Hacks,

00:00:04.620 | a show about upgrading your life, money, and travel.

00:00:07.500 | I'm Chris Hutchins, and today we have something

00:00:09.620 | a little different in store for you,

00:00:11.040 | and I think it's pretty awesome.

00:00:12.860 | So it all started when I thought about doing an episode

00:00:15.320 | about how to optimize the entire home buying experience.

00:00:18.440 | And I mean all of it, agents, listings, diligence,

00:00:21.540 | inspections, financing, offers, and everything in between.

00:00:25.380 | So while I've gone through this process twice,

00:00:27.780 | I wanted to make sure we had it all covered,

00:00:30.100 | including what you might do differently in today's market.

00:00:33.180 | So I reached out to David Green and Rob Abasolo,

00:00:36.220 | who hosts the number one real estate podcast out there,

00:00:39.260 | Bigger Pockets Real Estate,

00:00:40.740 | which I've listened to on so many occasions.

00:00:43.540 | They are 10 times more knowledgeable than I am in the space.

00:00:46.700 | David is a real estate investor

00:00:48.180 | with over a decade of experience.

00:00:50.020 | He's bought, rehabbed, and managed more than 50 properties.

00:00:53.340 | He runs an award-winning mortgage company

00:00:55.380 | and a top-producing real estate agent team.

00:00:58.220 | Rob is also a real estate investor

00:01:00.020 | and a 12-time Airbnb super host

00:01:02.700 | who is often called the king of short-term rentals.

00:01:05.700 | Between the three of us, we should leave no hack unturned,

00:01:08.820 | but please reach out to me if we do

00:01:10.460 | so I can make sure to share it on an upcoming episode.

00:01:13.420 | And one more thing.

00:01:14.660 | This episode isn't just coming out on all the hacks,

00:01:17.580 | but we broke it down into a three-part series

00:01:19.880 | on the Bigger Pockets feed as well,

00:01:21.860 | which is helpful context

00:01:23.140 | for the way we interact on this episode.

00:01:25.340 | And while you might not need to listen

00:01:26.900 | to the conversation twice,

00:01:28.260 | you should definitely check out their show.

00:01:30.220 | It is so fantastic.

00:01:31.780 | And with hundreds of episodes,

00:01:33.380 | I think they've covered just about every aspect

00:01:35.740 | of real estate possible,

00:01:37.260 | from buying, to investing, to house hacking,

00:01:39.580 | to short-term rentals, and a lot more.

00:01:42.020 | We'll make sure to mention a few relevant episodes today

00:01:44.540 | and link to them in the show notes as well,

00:01:46.500 | or you can just search wherever you're listening to this

00:01:48.940 | for Bigger Pockets Real Estate.

00:01:50.700 | But without further ado,

00:01:52.320 | let's jump into today's conversation right after this.

00:01:55.540 | I wish I could say I'm eating a fully balanced diet

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00:03:04.580 | That's allthehacks.com/AG and the number one.

00:03:09.580 | How the turntables have turned.

00:03:14.220 | Chris, welcome to our show,

00:03:16.180 | and I will just go ahead and welcome myself to your show

00:03:18.540 | to save you the time there.

00:03:19.780 | We've got a cool little crossover event going on here today.

00:03:22.920 | For those who are unfamiliar, my name is David Green.

00:03:24.980 | I'm a former police officer who became a real estate investor

00:03:29.000 | and is now a real estate broker.

00:03:30.480 | I have a mortgage company called The One Brokerage.

00:03:32.480 | I run a real estate team.

00:03:33.940 | I buy rentals, I write books,

00:03:35.280 | and I host The Bigger Pockets Podcast.

00:03:37.860 | And I'm Rob Abasolo.

00:03:39.440 | I am the co-host of The Bigger Pockets Podcast.

00:03:41.680 | I have a goofy YouTube channel called Rob Built

00:03:43.720 | where I teach people how to invest in real estate,

00:03:46.680 | short-term rentals, tiny homes,

00:03:48.400 | and I'm a former ad man, if you will,

00:03:50.840 | just like the Mad Men, the TV show is basically me.

00:03:53.080 | I was a copywriter and I quit all that corporate dreams

00:03:56.520 | about two years ago to focus full-time on real estate

00:03:59.360 | and documenting the journey.

00:04:01.280 | So let's jump in.

00:04:02.380 | Someone wants to buy a house.

00:04:03.480 | I always tend to ask people,

00:04:05.160 | before you're even thinking about this,

00:04:06.880 | why are you doing this?

00:04:07.920 | So I'm curious if you guys have any frameworks you use

00:04:10.800 | for thinking about why you would buy a house,

00:04:12.960 | what's important to you.

00:04:14.520 | It doesn't even make sense

00:04:15.800 | before we jump into optimizing the entire process.

00:04:19.160 | Well, I mean, there's a lot of reasons

00:04:20.920 | to get into real estate.

00:04:22.180 | I don't think that there's any one particular reason.

00:04:24.760 | Some people get into real estate accidentally

00:04:27.080 | where they buy a house and they live in that house.

00:04:29.640 | And then one day they decide to buy another house

00:04:33.040 | and move into that house.

00:04:34.040 | And then they have to decide,

00:04:35.120 | should they sell or keep the home?

00:04:36.840 | And then they become a landlord and then decide,

00:04:38.680 | oh, hey, the cashflow from this is great.

00:04:40.240 | And then they buy more houses.

00:04:41.600 | Some people buy a house and then house hack

00:04:43.840 | and rent out rooms and their home to subsidize

00:04:45.680 | their mortgage.

00:04:46.520 | And then there are also the other side of it

00:04:48.440 | where people work nine to five jobs

00:04:50.720 | and maybe they're not making enough money

00:04:52.400 | at that nine to five job

00:04:53.400 | and they want to create supplemental income.

00:04:55.560 | So they get into real estate

00:04:56.640 | to help create monthly cashflow,

00:04:59.200 | or maybe they just want to eventually replace

00:05:01.360 | their nine to five income with real estate.

00:05:03.360 | So for me, that was really why I got into it.

00:05:06.400 | I had a pretty stable career in advertising,

00:05:09.720 | never really felt like I was making enough money.

00:05:12.000 | And so my side hustle became real estate

00:05:14.680 | and I just started buying more properties

00:05:16.880 | as a way to make more money to supplement

00:05:19.000 | what I didn't feel like I was making at my career.

00:05:21.480 | What about you, David?

00:05:22.320 | What do you think?

00:05:23.160 | - You know, there's a lot of practical reasons

00:05:24.600 | why you want to invest in real estate.

00:05:26.120 | Even the casual observer sees home prices

00:05:28.640 | getting higher and higher and higher.

00:05:30.440 | You watch the HGTV shows that show

00:05:32.880 | how people can make money in real estate.

00:05:34.480 | It's kind of understood that it works,

00:05:36.400 | but not everyone knows the brass tacks

00:05:38.040 | of why you can make money with real estate.

00:05:39.840 | A lot of it are tax advantages, the tax code.

00:05:42.360 | It's very forgiving for real estate investors

00:05:44.360 | and the money that you make from real estate,

00:05:46.080 | you usually pay much less taxes on

00:05:47.960 | than if you made that same money at a job

00:05:50.400 | because there's a little bit of risk

00:05:51.440 | that's going to be involved in it.

00:05:52.840 | It's easy to leverage,

00:05:54.240 | meaning I can buy a $500,000 house

00:05:57.160 | and put maybe 5% down on the loan.

00:05:59.600 | So I've only put $25,000 of my money,

00:06:02.440 | but when that $500,000 house appreciates by 10%,

00:06:05.920 | it goes up to 550.

00:06:07.640 | My $25,000 just made me $50,000 of equity.

00:06:11.560 | So it's like I've doubled my money relatively quickly

00:06:14.760 | where it's harder to invest in other assets

00:06:17.120 | where you can borrow money quite as easily.

00:06:19.880 | And then there's lots of ways

00:06:20.880 | that real estate makes you money.

00:06:21.880 | You can buy it for less than market value.

00:06:23.760 | You can't really do that with a stock.

00:06:25.080 | You can't go get a deal on Tesla stock or Apple stock

00:06:28.240 | and find some way to get it cheaper.

00:06:30.080 | You can add value to the property.

00:06:31.920 | You can make it bigger.

00:06:32.800 | You can make it nicer.

00:06:33.800 | You can fix it out.

00:06:34.640 | You can change its use so that it can be rented to people.

00:06:37.200 | That creates actual equity,

00:06:38.840 | which you can't do with a stock.

00:06:40.120 | There's nothing I can do if I buy Tesla stock

00:06:41.960 | to make that company worth more.

00:06:44.600 | And then like Rob mentioned, it actually generates revenue.

00:06:47.280 | You can rent out spaces in that home.

00:06:49.520 | And when you do that correctly,

00:06:51.000 | you earn more money every month

00:06:52.480 | than what it costs to own the real estate.

00:06:54.080 | And that difference is what we refer to as cashflow

00:06:56.280 | and that can replace active income.

00:06:58.160 | For anyone listening from all the hacks

00:07:00.040 | that hasn't really got into real estate investing,

00:07:02.000 | you guys have done a great job.

00:07:03.600 | I'm gonna throw out an episode

00:07:04.600 | that is about getting started with just $10,000.

00:07:07.400 | I think it was episode 730

00:07:09.160 | 'cause I tried to take some notes ahead of time,

00:07:10.800 | but that was excellent.

00:07:12.480 | I will say the goal of this conversation

00:07:14.640 | is to kind of walk through the home buying process,

00:07:16.600 | whether you're trying to invest,

00:07:18.040 | whether you're just trying to buy your primary residence,

00:07:20.000 | whether you're buying even a vacation home or something.

00:07:22.160 | So if you're listening and you're thinking,

00:07:23.600 | "I don't know if I'm ready for real estate investing,"

00:07:26.160 | one, maybe you should be.

00:07:27.640 | And two, this is gonna be applicable to anyone,

00:07:30.320 | no matter what type of home you're buying,

00:07:31.720 | hopefully is what we can get to.

00:07:32.760 | So I don't know, that's a little bit of the why.

00:07:34.640 | For me, I've never actually dabbled too hard

00:07:37.200 | in real estate investing outside of index fund REITs,

00:07:40.920 | but I've gone through the home buying process

00:07:42.560 | as a primary residence,

00:07:43.900 | and I actually own a fractional vacation home.

00:07:46.220 | So I own 1/8 of a home through a program called Picasso,

00:07:49.000 | where we bought 1/8 of a home up in Napa.

00:07:51.520 | It's kind of interesting 'cause you can kind of invest.

00:07:53.360 | It's kind of a lot better, in my opinion,

00:07:55.000 | than a timeshare or anything like that.

00:07:56.680 | So that's been great.

00:07:57.520 | So that's my experience.

00:07:58.600 | And I've kind of optimized little pieces of it

00:08:00.600 | along the way, but nothing like what you guys have.

00:08:02.780 | So I'm excited.

00:08:04.080 | Curious, Chris, how well have you done?

00:08:06.240 | I think you said you bought a primary residence

00:08:08.000 | that you live in, right?

00:08:09.080 | Yep, I've done that twice now.

00:08:10.660 | Has that investment, if you just looked at it

00:08:12.580 | from a pure investment perspective,

00:08:14.040 | outperformed some of the other things you've invested in?

00:08:17.480 | The first time around, yes,

00:08:19.080 | but I had the fortunate luck of buying in the Bay Area

00:08:22.640 | at the bottom of the worst real estate crash.

00:08:25.160 | So I got quite lucky by timing.

00:08:27.320 | Didn't know it was gonna do as well as it did.

00:08:29.160 | The most recent one, I don't think it's been long enough

00:08:31.440 | to see anything major differences yet.

00:08:33.920 | But the first one, if you layer in taxes

00:08:36.160 | and leverage, yeah, it was a great investment.

00:08:37.840 | But it's hard with an N of one in a market

00:08:40.240 | that blew up like crazy to feel like I know too much

00:08:43.200 | based on one success story.

00:08:44.840 | That's how it works though, honestly.

00:08:46.760 | It really does work like that sometimes for people

00:08:50.080 | where for me, I think every real estate investor,

00:08:54.240 | they all have this big lofty dream of becoming a millionaire

00:08:57.280 | and it's super achievable because you can buy

00:08:59.960 | five properties that appreciate

00:09:01.900 | over the course of five, 10 years,

00:09:03.880 | and you could just have a million dollars in equity

00:09:05.760 | and it wasn't necessarily because you were a genius

00:09:08.200 | or because you had the most, I don't know,

00:09:10.280 | I already said a genius strategy, right?

00:09:11.920 | But it happens because you just did it

00:09:14.560 | and you kept doing it and you keep doing it consistently.

00:09:17.320 | And that's really the secret sauce.

00:09:18.480 | So yeah, maybe it was by luck that you bought that house

00:09:21.960 | or in that market.

00:09:22.800 | But what a lot of people end up doing is when that happens,

00:09:25.120 | they get a taste for it and then they keep just buying

00:09:27.000 | and buying and buying and buying.

00:09:28.480 | And I think if you do that consistently,

00:09:30.480 | no matter what, you'll always look like a genius

00:09:32.480 | 30 years from now.

00:09:33.880 | - Yeah, I mean, we could have a much longer debate

00:09:35.880 | in a future date about debating that strategy,

00:09:38.760 | putting it in a stock market,

00:09:39.960 | all these other investments.

00:09:41.040 | But I think whether you wanna build a portfolio of 20 homes,

00:09:44.500 | whether you wanna buy multifamily homes,

00:09:45.960 | commercial properties,

00:09:46.800 | or you just wanna buy a primary residence,

00:09:48.120 | at the end of the day, you gotta find a home,

00:09:50.340 | you gotta buy the home,

00:09:51.180 | you gotta decide if it's a good deal,

00:09:52.540 | you gotta close on it,

00:09:53.460 | you gotta fund the purchase

00:09:54.920 | unless you wanna buy it with cash,

00:09:56.040 | which I'm guessing most people don't.

00:09:57.880 | So maybe let's jump into that process

00:10:00.240 | and kick off with just someone who's like,

00:10:02.200 | "I'm not really sure what I'm doing."

00:10:03.920 | You've been an agent.

00:10:04.880 | Let's talk a little bit about that process

00:10:06.880 | of partnering with someone

00:10:08.000 | to help you go through this process

00:10:09.920 | instead of just trying to wing it on your own

00:10:12.000 | and when that makes sense or maybe when it doesn't.

00:10:14.560 | - Yeah, and if you're gonna buy a property,

00:10:16.240 | you don't know much about it,

00:10:17.080 | you definitely wanna use a real estate agent

00:10:18.880 | in the beginning.

00:10:19.840 | And when you're buying,

00:10:20.720 | here's something people don't realize,

00:10:22.440 | you don't have to pay your agent.

00:10:24.480 | If you're buying a house off of the MLS,

00:10:26.480 | this would be any property you see off Zillow or Redfin,

00:10:28.760 | something like that.

00:10:29.940 | The seller has already predetermined

00:10:32.080 | a certain amount of money.

00:10:33.360 | They are going to pay the buyer's agent

00:10:35.480 | for bringing you to the property.

00:10:37.240 | So you have a lot of questions,

00:10:38.920 | there's paperwork you're not going to understand,

00:10:40.680 | you don't know what the process is, it's intimidating.

00:10:43.120 | You find a real estate agent and I'll add,

00:10:44.600 | they're not all the same.

00:10:45.440 | There's good agents and bad agents,

00:10:46.840 | there's good lawyers and bad lawyers,

00:10:48.440 | good doctors and bad ones.

00:10:49.480 | You really wanna find somebody who's good at what they do.

00:10:51.960 | They can take a lot of the fear that you have

00:10:54.240 | right out of it.

00:10:55.080 | I mean, it's amazing when you take this scary process

00:10:57.800 | and there's a person that, like me,

00:10:59.040 | that does this so often, it's boring to me.

00:11:01.200 | Like, "Oh, another one of these.

00:11:02.440 | "I've walked this path so many times."

00:11:04.420 | It's definitely not scary.

00:11:06.000 | So that's something that every person

00:11:07.500 | who wants to buy a home should know right off the bat.

00:11:09.500 | Find a buyer's agent.

00:11:10.700 | They're gonna answer a lot of the questions

00:11:12.180 | that you're gonna have and they're going to protect you

00:11:13.840 | in ways you didn't even know

00:11:15.380 | that you needed to be protected.

00:11:16.820 | And maybe we can go through

00:11:17.700 | what the actual escrow process looks like

00:11:19.780 | or the process from start to finish

00:11:21.180 | of what to expect when buying a home if you'd like.

00:11:23.300 | If you're a little bit more experienced,

00:11:25.060 | you bought homes before,

00:11:26.660 | one thing that people will look at,

00:11:27.940 | especially in a competitive market like ours, Chris,

00:11:29.860 | we just realized that we're neighbors.

00:11:31.260 | We live pretty close to each other.

00:11:32.360 | Probably I can power in some change away,

00:11:34.900 | is you can go directly to the listing agent

00:11:37.440 | and you can say, "Hey, I will let you represent me

00:11:39.540 | "on this deal, but I'm gonna need some kind of an advantage.

00:11:42.720 | "I need you to get my offer accepted over the other people,

00:11:45.540 | "or I'd like a little bit of a discount on the price

00:11:47.660 | "if you're gonna need to represent me here."

00:11:49.500 | So there are people who buy a lot of real estate

00:11:51.460 | that has said, "Hey, I don't think I need

00:11:52.800 | "my own buyer's agent necessarily.

00:11:54.620 | "I still need someone to handle the paperwork."

00:11:56.460 | But they go right to the listing agent

00:11:58.220 | and they look for an advantage.

00:11:59.220 | And that is pretty popular in the Bay Area

00:12:01.620 | where most listings are getting

00:12:03.060 | several offers on all of them.

00:12:04.780 | - Actually, I have bought two homes in the Bay Area

00:12:06.900 | and both times I've used the seller's agent.

00:12:09.140 | So we can talk about that a little bit more

00:12:10.560 | 'cause I have some thoughts about it,

00:12:11.820 | but maybe rewind a little.

00:12:12.940 | You said it's important not all agents are the same.

00:12:15.140 | You gotta pick the right one.

00:12:16.580 | Obviously not everyone lives in the Bay Area,

00:12:18.200 | so you're not gonna be the perfect agent for everyone.

00:12:19.940 | How does someone find that perfect agent?

00:12:21.980 | - First thing to look for,

00:12:23.060 | find a person that sells a lot of houses.

00:12:25.060 | Lot of agents don't.

00:12:26.020 | In fact, most agents don't.

00:12:27.260 | I'd say 90% of agents sell a couple houses a year or less.

00:12:31.740 | And it's unpopular to say this.

00:12:33.040 | The agents get angry 'cause they're offended right now.

00:12:35.380 | Like, "Just because I only sell two houses a year

00:12:37.180 | "doesn't mean I'm not good."

00:12:38.220 | Okay, I know.

00:12:39.380 | However, tell me anything that you do twice a year

00:12:42.060 | that you get really, really good at.

00:12:43.580 | In general, that's how life works.

00:12:45.140 | If you snowboard twice a year for your whole life,

00:12:47.360 | you never really get that good at snowboarding.

00:12:49.020 | Or it takes you 20 years before you're as good as somebody

00:12:51.540 | that just snowboarded every weekend

00:12:53.320 | for the whole first year that they got into it.

00:12:54.840 | Repetition really does develop mastery.

00:12:57.380 | I talk about that in the Burr book that I wrote.

00:12:59.580 | So the first thing I look for

00:13:00.660 | is an agent that sells a lot of homes, period.

00:13:02.740 | The next thing I want is an agent

00:13:04.100 | that owns real estate themselves.

00:13:06.100 | At minimum, they gotta own their own house.

00:13:07.940 | But ideally, I want them to own investment property.

00:13:10.620 | It gives a completely different perspective

00:13:12.980 | when you've bought a home and you believe in it

00:13:15.420 | and you just get a different set of goggles

00:13:18.020 | to look at real estate through.

00:13:19.380 | I don't have any kids.

00:13:20.420 | I love kids.

00:13:21.240 | We were talking about that before the show.

00:13:22.740 | But each of you as a dad, I am sure,

00:13:25.560 | sees something different when you look at a kid than I do.

00:13:28.360 | I don't immediately freak out

00:13:29.780 | when they start putting something in their nose.

00:13:31.780 | I haven't had enough experience

00:13:33.000 | of seeing how that could go wrong.

00:13:34.700 | Rob has seen some of that.

00:13:36.540 | So he's gonna have a much different emotional response

00:13:39.540 | to that marble or that Play-Doh

00:13:41.400 | getting a little bit close to the nostrils.

00:13:43.500 | Real estate agents that own real estate have that sixth sense.

00:13:46.380 | They can recognize that's a bad neighborhood,

00:13:48.240 | that's not the right tenant,

00:13:49.580 | that's not the right floor plan,

00:13:50.920 | that's not the right structure.

00:13:51.980 | You really wanna go to this house

00:13:53.940 | that may not look as pretty in the pictures

00:13:56.060 | but will be a better deal.

00:13:58.060 | The third thing that you wanna look for

00:14:00.140 | is an agent that understands

00:14:01.740 | the financial component of real estate.

00:14:03.620 | Many real estate agents are geared

00:14:06.260 | to cater to their clients' emotions.

00:14:08.120 | They wanna be liked.

00:14:09.100 | They're very high as an eye on the disc profile.

00:14:12.180 | This is how they make their money, by being likable.

00:14:14.040 | Most people reach out to the agent

00:14:15.580 | who's the nicest, the friendliest, the warmest.

00:14:17.500 | That doesn't mean they're the smartest.

00:14:19.200 | So when you're having conversations,

00:14:20.500 | I always wanna hear agents that are approaching real estate

00:14:22.780 | from a financial perspective.

00:14:24.220 | I wanna hear them telling me,

00:14:25.580 | "This is the part of town that's being redeveloped.

00:14:27.580 | "This is the next up and coming area.

00:14:29.760 | "This is where all the money is going into.

00:14:32.020 | "This is a property that would function as a rental

00:14:34.240 | "if you moved out."

00:14:35.600 | Even if that's not necessarily what you're looking for,

00:14:38.480 | you just wanna buy a home.

00:14:39.820 | If your agent sees things that way,

00:14:41.780 | it is very good to hedge your bets in the future

00:14:43.740 | 'cause you never know when you have more kids,

00:14:45.260 | need more bedrooms, get a new job,

00:14:46.780 | wanna move for some reason.

00:14:48.260 | You don't wanna be locked into a situation

00:14:49.980 | where it's hard to sell that home

00:14:51.140 | or it can't be used as a rental property

00:14:52.740 | if you wanna leave it.

00:14:53.740 | - David, let me ask you something.

00:14:55.100 | Does the requirement of having an agent

00:14:58.860 | that owns real estate,

00:15:00.020 | is that as important if you're just buying

00:15:02.500 | a primary residence?

00:15:04.380 | Do you weight that a lot heavier

00:15:05.820 | for people that are looking to buy investment properties?

00:15:08.700 | - No, it's the same for a primary residence.

00:15:10.500 | Let me tell you why.

00:15:11.340 | The first house I ever bought,

00:15:13.020 | my agent did not own any real estate.

00:15:15.500 | And I bought this house in the very end of 2009.

00:15:17.980 | Great time to buy real estate, like you were saying, Chris.

00:15:20.540 | My agent did not tell me that the property taxes

00:15:23.780 | in that area had special assessments assigned to them

00:15:26.420 | and were much higher than the normal property taxes.

00:15:29.720 | In fact, they ended up being about $250 a month higher.

00:15:33.080 | So I was expecting 300, they were 550.

00:15:35.820 | Now, I was buying this as a rental property,

00:15:38.380 | but even if I had bought buying it to live in,

00:15:41.140 | and again, I remember at the time,

00:15:42.260 | the total mortgage was like $1,300.

00:15:44.300 | So bumping it from 1,300 to 1,550

00:15:46.500 | was a pretty significant chunk.

00:15:47.980 | It's like a 20% increase almost in my overall payment

00:15:51.380 | because they overlooked that property taxes were higher.

00:15:54.100 | Now, agents who own real estate themselves

00:15:56.780 | would be familiar with the fact

00:15:58.620 | that property tax bills come.

00:16:00.220 | There's more expenses than just your principal

00:16:02.140 | and interest on your mortgage.

00:16:03.620 | They would see angles like insurance can increase

00:16:05.860 | in this area because it's in a flood zone.

00:16:08.460 | I really think she missed it

00:16:09.760 | because she had never paid a mortgage on her own.

00:16:12.260 | She never had her taxes and her insurance escrowed

00:16:15.940 | into her mortgage payment.

00:16:17.580 | The next time I bought a house,

00:16:19.000 | it was with an agent that had been selling houses

00:16:20.940 | for a very long time and sold a lot

00:16:22.660 | and owned a lot of real estate herself.

00:16:24.220 | And as we went through the process, she educated me.

00:16:27.660 | You don't wanna buy on that part of town

00:16:29.380 | because you're gonna pay extra money

00:16:30.720 | to get the better school districts.

00:16:32.020 | You don't wanna buy over there 'cause the taxes are higher.

00:16:34.360 | You don't wanna buy a house like that

00:16:35.640 | because with that kind of a roof,

00:16:36.820 | your insurance is gonna be a lot higher.

00:16:38.660 | I learned so much about investing in real estate

00:16:41.380 | just from the person that was getting paid to help me.

00:16:43.700 | It was like free advice and free knowledge

00:16:46.460 | and it really gave me a different perspective

00:16:48.100 | of what to look for and what to avoid.

00:16:50.760 | - I love it.

00:16:51.600 | When it comes to optimizing the home buying experience,

00:16:55.460 | I can't think of a better example of me doing this myself

00:16:58.540 | than when we thought about buying a vacation home.

00:17:00.820 | Now, I've long thought that buying a second home

00:17:03.080 | was a terrible financial decision

00:17:04.980 | because the sheer fact that it's a second home

00:17:07.300 | means there's no way you're gonna be spending

00:17:09.000 | the whole year there,

00:17:10.100 | which means you're either paying for a house to sit empty

00:17:12.540 | or you have to manage a rental property,

00:17:14.180 | which I just don't wanna do.

00:17:15.900 | So how do you optimize that?

00:17:17.700 | Well, instead of buying the whole home,

00:17:19.600 | we just bought 1/8 of a home for 1/8 the price

00:17:22.820 | and we did it all through Picasso,

00:17:24.420 | who I'm excited to partner with for this episode.

00:17:27.100 | So how does it work?

00:17:28.140 | Picasso buys amazing luxury homes

00:17:30.500 | in over 40 world-class destinations,

00:17:33.080 | creates an LLC for each home,

00:17:35.060 | and you can buy as little as 1/8 of the property.

00:17:37.660 | But it doesn't stop there.

00:17:38.960 | Picasso also professionally manages the home,

00:17:41.860 | handling design, cleaning, maintenance,

00:17:44.180 | bills, repairs, taxes, and more.

00:17:46.340 | And the scheduling system makes it fair and equitable

00:17:49.060 | for everyone to enjoy their home.

00:17:51.100 | And it's true real estate ownership.

00:17:52.940 | Owners can sell at any time, set their own price,

00:17:55.860 | and tap into Picasso's active marketplace of buyers.

00:17:59.340 | We love our Picasso.

00:18:00.660 | I think you will too.

00:18:01.980 | So for a modern way to buy and own a second home,

00:18:04.940 | go to allthehacks.com/picasso,

00:18:07.820 | where our listeners will get a free Picasso access account,

00:18:11.060 | which means you can see new listings

00:18:12.600 | before they go live on the website

00:18:14.580 | and get up to $10,000 in credit towards closing costs.

00:18:18.700 | Again, that's allthehacks.com/picasso,

00:18:21.940 | P-A-C-A-S-S-O.

00:18:24.360 | I have so many exciting projects happening right now.

00:18:28.500 | I launched the All The Hacks membership,

00:18:30.140 | I'm working on a book proposal,

00:18:31.700 | and that's on top of running the podcast and newsletter.

00:18:34.700 | Even just a few years ago,

00:18:36.060 | I would have been running all that

00:18:37.260 | with some combo of Google Docs, Office Files and Dropbox,

00:18:40.500 | a private wiki site, emails back and forth,

00:18:43.180 | and probably other things I can't think of

00:18:44.820 | because I forgot where they are.

00:18:46.700 | I can't believe how crazy I ran things,

00:18:48.500 | but now pretty much every project we have for our family

00:18:51.540 | and All The Hacks is organized in Notion.

00:18:54.300 | I love the product so much,

00:18:56.020 | which makes it so easy to be excited

00:18:58.180 | to partner with them on this episode.

00:19:00.060 | Notion is so flexible and customizable,

00:19:02.480 | and every project you have

00:19:04.140 | can be set up exactly how you wanna view it,

00:19:06.460 | whether it's a timeline, a table, or even a Kanban board.

00:19:09.800 | There's also powerful filtering and automation features

00:19:12.420 | so you can work exactly the way you want.

00:19:14.660 | And with their latest launch of Notion Projects,

00:19:16.900 | you get project management

00:19:18.220 | combined with your docs, knowledge base, and AI,

00:19:21.300 | so you can stop jumping between tools

00:19:23.340 | and stop paying too much for them too.

00:19:25.900 | Do your most efficient work with Notion Projects.

00:19:28.700 | You can try it for free today at notion.com/allthehacks.

00:19:33.220 | That's all lowercase letters, notion.com/allthehacks.

00:19:37.880 | When you use our link, you're supporting our show.

00:19:40.260 | Go right now to notion.com/allthehacks.

00:19:44.820 | - I just sent a link to you.

00:19:46.060 | There's this guy in Northern California,

00:19:48.020 | maybe you know him, Stanley Lowe,

00:19:49.780 | number one agent in Northern California for 10 years,

00:19:52.820 | looks like and is commonly described in San Mateo County

00:19:56.140 | as like the Asian Elvis of real estate agents.

00:19:59.380 | And so when you first said,

00:20:01.140 | "Look for someone who sells a lot of houses,"

00:20:02.820 | I know this guy, I get the flyers in the mail,

00:20:05.180 | like he sells all the houses, high volume, high throughput,

00:20:08.700 | not just low income property, all kinds of price ranges.

00:20:12.640 | Does that mean that if I were looking for a real estate agent

00:20:14.460 | like, would he be the right guy?

00:20:16.460 | Should I consider him?

00:20:17.340 | Even though it might not feel like someone's personality,

00:20:21.100 | maybe that's not the personality I would want

00:20:23.340 | as my real estate agent.

00:20:24.460 | But like, do the numbers speak more than a personality?

00:20:27.300 | How do you think about that?

00:20:28.140 | And if anyone's curious, greenbanker.com

00:20:30.660 | is this real estate agent's website.

00:20:32.920 | - He's got it down, I will say that.

00:20:34.500 | I mean, the marketing, the cowhide blazer

00:20:37.900 | and the big circular glasses, I'm in, personally.

00:20:41.220 | - That's funny, 'cause I'd be running the other way

00:20:43.460 | the minute I saw this.

00:20:45.020 | So he does sell a lot of homes, I'm sure.

00:20:46.900 | And so he probably does have some experience.

00:20:48.880 | My gut would tell me, as someone who has worked

00:20:51.540 | with a lot of clients and knows a lot of realtors,

00:20:54.260 | this is probably not someone

00:20:55.420 | who's actually going to be representing you.

00:20:57.460 | He's going to have staff

00:20:58.660 | that are going to be handling a lot of it.

00:21:00.000 | You're not gonna be talking to Stanley.

00:21:01.900 | And he's going to likely make up

00:21:03.900 | for a lack of negotiation ability

00:21:06.100 | and focus on saving you money or making you money,

00:21:09.380 | if it's a listing, with his personality.

00:21:11.620 | So he's a great marketer.

00:21:13.020 | And the top producing agents are always the best marketers.

00:21:16.100 | This is a problem in our industry.

00:21:17.860 | The best agents don't make the most money.

00:21:19.960 | The ones that are best at getting the phone to ring

00:21:22.540 | make the most money, but that doesn't mean

00:21:23.900 | that they're the best when it comes to representing you.

00:21:26.160 | - So you want someone that sold a lot of houses,

00:21:27.620 | but maybe you don't necessarily want the person

00:21:30.140 | who markets themselves as the person

00:21:31.820 | who sold the most houses.

00:21:33.540 | So it's kind of that sweet spot

00:21:35.180 | of maybe like the 60th to 90th percentile,

00:21:38.420 | but not the very top.

00:21:39.740 | - There's a lot of things people fall for.

00:21:41.360 | I sell the most houses in this neighborhood.

00:21:43.140 | Realtors will use that as a way of saying,

00:21:44.820 | "I'm the best. Don't fall for that."

00:21:46.940 | It makes sense to our perspective

00:21:48.720 | when we're listing the home,

00:21:49.560 | "Oh, you sell all the houses in the neighborhood.

00:21:51.020 | You know how to get me top dollar."

00:21:52.760 | You just don't realize until you think about it,

00:21:54.780 | the buyers don't care.

00:21:56.220 | The buyers don't care who's selling that house.

00:21:58.120 | They are never going to look at who the listing agent is

00:22:00.520 | when they're writing their offer.

00:22:01.360 | They just care about the house.

00:22:02.880 | The buyer's agent needs to know the neighborhood.

00:22:04.800 | The buyer's agent needs to know the amenities.

00:22:07.480 | When you're looking to buy somewhere,

00:22:08.880 | you want an agent that knows the area very well.

00:22:10.760 | When you're looking to sell,

00:22:12.120 | it will never matter how many homes

00:22:14.100 | in the area that agent sold.

00:22:15.760 | In fact, the only reason they sell a lot of homes

00:22:17.680 | in the same area is they put their sign in all the yards,

00:22:20.080 | and then they go, we call it farming,

00:22:21.320 | knocking on all the doors and meeting all the people,

00:22:23.660 | getting their name out there.

00:22:24.920 | They're just able to utilize a listing

00:22:26.880 | to build leverage to get more.

00:22:28.240 | But there's no competitive advantage

00:22:29.880 | when it comes to representing a seller

00:22:31.560 | if you've sold other homes in the area.

00:22:33.880 | I wanted to add one thing to that.

00:22:35.640 | Well, A, it sounds like if they're putting signs

00:22:37.440 | in everyone's yards, sounds like they're good marketers,

00:22:39.680 | which goes back to what you were saying.

00:22:41.760 | But I did want to say that one really important piece

00:22:44.520 | to agents, just from a consumer side,

00:22:46.560 | and as someone that relies on agents pretty heavily,

00:22:49.440 | is them having a really thorough Rolodex

00:22:53.540 | of vendors that I can use to help me run my properties,

00:22:56.480 | whether I'm living in it or not.

00:22:58.000 | If I'm buying a short-term rental, for example,

00:23:00.240 | I know I need a contractor, cleaner, landscaper,

00:23:03.560 | pool maintenance person, pest control,

00:23:06.480 | and probably a plumber, electrician,

00:23:08.480 | and all that type of stuff.

00:23:09.300 | So when I'm calling a realtor,

00:23:11.480 | and this goes into how many houses have they sold,

00:23:13.760 | if they've sold a lot of houses over the last five, 10 years,

00:23:16.920 | they probably have a pretty thorough Rolodex,

00:23:19.080 | I mean, outdated term.

00:23:20.320 | If they use the term Rolodex, maybe they're not with it.

00:23:22.500 | But if they have a very big contact list

00:23:25.120 | of all these different vendors,

00:23:26.640 | that's what I'm personally looking for in a realtor,

00:23:28.800 | because a lot of the times,

00:23:30.360 | I really need a firsthand referral

00:23:32.380 | to know that I can successfully either live in a property

00:23:35.840 | or execute a rental.

00:23:38.060 | - Yeah, that Rolodex is interesting.

00:23:39.360 | Something I never saw in the contract,

00:23:41.200 | but once you close, I was surprised

00:23:43.720 | that even though it's not necessarily required,

00:23:45.720 | a good agent will spend so much time

00:23:47.320 | helping make sure the process from,

00:23:49.480 | I closed to, I moved in, I got the yard done,

00:23:51.960 | I renovate, even renovated something.

00:23:53.960 | They've been super helpful there.

00:23:55.240 | We have a lot to go here,

00:23:56.200 | but I do wanna touch quickly on that negotiating piece

00:23:59.440 | that you mentioned earlier, David.

00:24:01.000 | When someone's trying to get into this,

00:24:02.420 | what leverage or room is there for negotiating?

00:24:04.900 | I did what you suggested.

00:24:05.960 | I went to the seller's agent and said,

00:24:07.680 | "Hey, I don't wanna mess around.

00:24:09.040 | "I know I want this house.

00:24:10.100 | "I don't need to go find another agent.

00:24:11.560 | "I feel good in negotiating.

00:24:12.980 | "Will you work with me?"

00:24:14.720 | It ended up being a great situation

00:24:16.900 | because that agent got more commission

00:24:18.680 | and was a little bit more biased

00:24:20.200 | towards trying to get my purchase over the finish line.

00:24:22.840 | And in one case, rebated 1% of their fee back to me.

00:24:26.600 | Are there other rooms for negotiation?

00:24:28.600 | Are there other tactics someone can use

00:24:30.240 | to get a better price or likelihood of getting accepted?

00:24:33.400 | Well, the first thing you have to do is define a win.

00:24:35.860 | So in a situation where the house is getting 10 offers,

00:24:38.440 | a win is just getting it at all.

00:24:40.240 | There are times in the Bay Area or other hot markets

00:24:42.680 | with restricted supply and lack of inventory

00:24:45.840 | that you're just not gonna get a home, period.

00:24:48.080 | It's incredibly hard to get in contract

00:24:49.880 | you're competing with so many people.

00:24:51.680 | So in those situations,

00:24:52.760 | you're not gonna get a discount from your listing agent.

00:24:55.080 | You're not gonna get a better price on the home.

00:24:57.200 | You just have to get it.

00:24:58.760 | Now in other situations,

00:25:00.260 | which is what I try to target my clients into,

00:25:02.640 | I show them properties that less people are competing with.

00:25:05.800 | The listing photos are ugly.

00:25:07.360 | It's been in contract, it fell out of contract.

00:25:09.520 | Now the days on market have ticked up

00:25:11.200 | and people aren't looking at it anymore.

00:25:13.340 | I look for opportunities to help them get into a property

00:25:16.280 | with much less interest

00:25:17.400 | and then we can get them a discount on the price.

00:25:19.880 | We can save them some money there.

00:25:21.160 | A mistake a lot of people make

00:25:22.320 | is they go to the listing agent

00:25:23.720 | of an incredibly hot property.

00:25:25.720 | They ask for a discount from the listing agent

00:25:28.160 | and they go, "No, there's like 12 other people

00:25:30.320 | "that wanna buy this house.

00:25:31.400 | "I can get my client a hundred grand more

00:25:32.960 | "going with a different offer.

00:25:34.100 | "I'm not gonna discount commission just to help you get it."

00:25:36.440 | So that's a big piece is knowing

00:25:38.360 | when you have leverage and when you don't.

00:25:40.320 | - I wanna talk about making that offer now, right?

00:25:42.280 | Like let's say someone's gone through this process,

00:25:43.960 | they pick their agent,

00:25:45.040 | they've figured out what they're doing

00:25:46.440 | and they find a house and they're trying to decide,

00:25:49.040 | is this a good house?

00:25:49.880 | So let's start with that before we get to the offer.

00:25:51.640 | It's like you have a place in mind,

00:25:53.240 | you're looking at this listing.

00:25:55.080 | Maybe you do, maybe you don't have an agent yet,

00:25:56.640 | but what are the things that are really important

00:25:58.160 | for someone to be paying attention to

00:25:59.940 | when they're looking at a listing

00:26:01.200 | either online or in person?

00:26:03.040 | - I like to find stuff that needs a little bit of work,

00:26:05.920 | a little TLC personally on my end,

00:26:08.380 | just because I don't really like paying the premium

00:26:11.200 | of someone else's fine-tuned work

00:26:13.880 | that I probably don't like anyway.

00:26:16.520 | So I don't wanna go in and usually do like a full rehab.

00:26:19.240 | That's not really my space,

00:26:20.440 | but I'm looking for something that I can really spice up

00:26:22.480 | with a nice paint job,

00:26:24.200 | maybe doing a lighter cosmetic renovation,

00:26:26.700 | like changing out the floors or something like that.

00:26:28.800 | So I'm not necessarily looking for top tier,

00:26:30.800 | I'm just looking for something that I can come in

00:26:32.400 | and kind of add my touch to.

00:26:34.140 | I don't really like paying

00:26:35.160 | for turnkey properties personally,

00:26:36.760 | but it all comes down to what your buy box is.

00:26:39.560 | What about you, David?

00:26:40.480 | - In a hot market like where we are today,

00:26:42.760 | it's usually a good time to buy real estate

00:26:44.200 | because when there are more buyers

00:26:46.320 | than there are product to buy,

00:26:48.300 | the odds of prices increasing are favorable

00:26:50.960 | because you've got a favorable supply demand ratio there.

00:26:54.400 | However, it becomes harder to get into the asset

00:26:56.960 | in those environments,

00:26:58.200 | which is why most people get discouraged.

00:27:00.540 | There's also an element where people aren't educated,

00:27:02.580 | so they all chase after the same homes.

00:27:04.600 | They want the ones with the best listing photos,

00:27:06.880 | the best locations, they're moving ready,

00:27:09.040 | that gives you that emotional tingle that you just love.

00:27:11.760 | You're just looking for something

00:27:12.980 | that other people are gonna pass up

00:27:14.560 | that you see the value in,

00:27:16.180 | that you're gonna put a little bit of elbow grease into.

00:27:18.120 | Sometimes bad smells can really benefit you

00:27:20.480 | when you're trying to buy a home

00:27:21.320 | 'cause it's gonna turn off a lot of your competition.

00:27:23.560 | Ugly floor plans.

00:27:24.520 | People don't realize it's usually not as expensive

00:27:26.400 | as you think to move walls around,

00:27:28.160 | but when it's got a closed off kitchen,

00:27:29.520 | you can't see what's going on in the family room.

00:27:31.600 | The wife's thinking, I can't see what the kids are doing.

00:27:33.640 | I just don't like it.

00:27:34.480 | That's as far as they go.

00:27:35.400 | They don't realize that you could spend $2,000

00:27:37.480 | and move a wall.

00:27:38.640 | You can see everything that's going on there.

00:27:40.520 | Then painting and flooring.

00:27:41.960 | You can fix homes up for a lot less

00:27:44.160 | than what people think today,

00:27:45.480 | but you have to see the opportunity,

00:27:47.200 | not the move-in ready product.

00:27:48.960 | - And so how does how long the house

00:27:50.920 | has been on the market play into this?

00:27:52.200 | When you see something that's been on for a while.

00:27:54.200 | - When a seller first puts their house on the market,

00:27:56.680 | they have all the leverage.

00:27:58.320 | They have tons of interest.

00:27:59.640 | People are going to look at their home.

00:28:01.100 | Showings are being scheduled.

00:28:02.680 | Agents are calling all excited.

00:28:04.080 | We really love the house.

00:28:05.080 | Do you have any other offers?

00:28:06.160 | It's this frenetic, crazy, emotional pace

00:28:09.060 | where the sellers are trying to think of

00:28:10.400 | how can I leverage this to get as much money as possible,

00:28:13.040 | which is really where I'm trying to guide my clients away.

00:28:15.080 | I don't want you in that feeding frenzy.

00:28:17.040 | If no one buys that house after 14 to 21 days,

00:28:20.320 | interest is starting to slow.

00:28:21.920 | By day 30, day 40, they're getting worried, okay?

00:28:25.440 | It's not who's the best guy that I can take

00:28:27.800 | that gets to take me to prom.

00:28:29.160 | It's, am I going to prom at all?

00:28:31.120 | I just want a date.

00:28:32.080 | Does anyone want to buy my house?

00:28:33.440 | I'm stuck.

00:28:34.280 | I might not be able to move.

00:28:35.640 | And I write about this in some of the books

00:28:37.080 | that I've published for BiggerPockets for agents.

00:28:38.920 | There's this spectrum of fear and greed.

00:28:41.280 | We usually all start off on the greed side.

00:28:43.600 | And as you slide across, you end up in the fear side.

00:28:46.840 | And you're worried, I might not sell the house at all.

00:28:49.120 | So in most markets,

00:28:50.480 | depending on what your average day is on market,

00:28:52.480 | like this wouldn't apply in an area

00:28:54.480 | with $7 million homes that tend to sit on the market

00:28:56.920 | for six months before they sell.

00:28:58.560 | But for your regular starter homes,

00:29:00.520 | they should be selling in less than 30 days

00:29:02.200 | in most markets in the country.

00:29:03.280 | So the minute you get past that point,

00:29:05.520 | you're going to start seeing some worry in sellers

00:29:07.800 | and they will be open to more aggressive offers

00:29:10.280 | or terms that are more favorable to the buyer.

00:29:12.440 | - What happens if you are in a hot market

00:29:14.000 | and let's say you've identified a neighborhood,

00:29:16.520 | you've looked, maybe a house comes on

00:29:18.280 | every two or three months,

00:29:19.360 | and you know like, this is what I want.

00:29:21.560 | You say, the moment that house comes on the market,

00:29:23.960 | it's hot, it's the worst time.

00:29:25.680 | Is there a way to find homes

00:29:27.000 | before they get on the market and buy them?

00:29:28.840 | Is that finding the right agent?

00:29:30.480 | Or how do you get what might be a hot home before it's hot?

00:29:34.360 | - Rob, what have you been doing?

00:29:35.240 | You've gotten a couple of deals this way.

00:29:36.880 | - Let's see, there's the creative finance

00:29:38.640 | and the sub two deal, right?

00:29:39.880 | And that's effectively where you're cold calling

00:29:42.280 | a bunch of property owners and also wholesaling

00:29:44.760 | where you cold call property owners

00:29:46.680 | and basically try to buy the property directly from them

00:29:50.320 | versus going the realtor route.

00:29:51.920 | That's a very popular niche within real estate.

00:29:54.160 | But honestly, I think having a really big network

00:29:56.920 | of realtors that you're friendly with is super important

00:30:00.000 | and more than just having like a bunch of realtors

00:30:02.560 | in your network.

00:30:04.000 | And this is sort of where the marketing thing

00:30:05.600 | kind of comes into play too.

00:30:07.320 | But finding a realtor that's very good at marketing

00:30:09.960 | and having a vast network of realtor friends

00:30:12.760 | that can pass each other deals to you

00:30:14.920 | or pass deals to each other, that to me is super important.

00:30:18.080 | Because if you find someone that's like a very new

00:30:19.960 | and very green in the industry,

00:30:22.160 | they probably don't have a lot of other

00:30:23.800 | real estate colleagues necessarily.

00:30:25.600 | But if it's someone that's been working

00:30:26.680 | in the industry for a while,

00:30:28.320 | they have the opportunity to find all these deals

00:30:30.400 | before they ever hit the market.

00:30:31.480 | So I have realtors that are texting me all the time

00:30:33.400 | that they're like, "Hey, my bud just sent me this.

00:30:35.480 | "It's gonna hit the market next week.

00:30:37.280 | "They're interested in selling it

00:30:38.360 | "before even going to market.

00:30:39.640 | "Are you interested?"

00:30:40.880 | And I'll look at a deal much quicker,

00:30:42.680 | much faster and much more intentionally

00:30:44.400 | knowing that I've got first dibs on it.

00:30:46.640 | - Do you think that applies for kind of consumer?

00:30:48.720 | If I'm looking to buy a home in a neighborhood,

00:30:50.640 | should I just talk to all the agents in the neighborhood

00:30:53.040 | and say, "Hey, I'm looking to buy a home.

00:30:54.240 | "There's nothing on the market I want right now.

00:30:56.280 | "But I just want you to know,

00:30:57.560 | "if you can find me something, I'm ready to go."

00:30:59.760 | And just talk to 10 agents.

00:31:01.520 | Do agents like that kind of behavior or?

00:31:03.960 | - No, not really.

00:31:05.040 | 'Cause you kind of send the message

00:31:06.720 | that you're looking for an open relationship

00:31:08.720 | and they're wanting a committed relationship.

00:31:11.240 | So it doesn't benefit me as an agent.

00:31:13.400 | If you come and you're talking to 12 agents in the areas,

00:31:15.840 | "If you find me the deal, I'll buy it from you."

00:31:18.400 | That sounds great, but I don't need to sell it to you.

00:31:20.680 | If I get a listing, it's so hot right now,

00:31:23.200 | everyone's gonna wanna buy it.

00:31:25.080 | I don't have to discount my commission.

00:31:26.760 | There's people that would probably give me extra commission

00:31:28.840 | if they wanted to get that home.

00:31:30.120 | Or I wanna be able to go to my seller

00:31:31.800 | and tell them I got 10 offers on their home

00:31:33.560 | and I wanna look like a rockstar to them.

00:31:35.160 | So I don't think the go wide instead of deep strategy works,

00:31:39.960 | unless it's a buyer's market.

00:31:41.640 | When you are in those situations

00:31:43.040 | where it's very difficult to find someone to buy a home,

00:31:46.000 | we're talking 2010 when there was first sales signs

00:31:48.280 | everywhere, listings were all over the place,

00:31:50.440 | REO inventory was massive,

00:31:52.520 | but there weren't a lot of pre-approved buyers

00:31:54.040 | that were willing to step in and buy a house.

00:31:55.880 | Then that strategy makes a lot more sense.

00:31:57.880 | That's where you're reaching out to all these agents saying,

00:31:59.880 | "Hey, if you get a deal, bring it to me and I'll buy it

00:32:02.600 | because you're the prize in that situation."

00:32:04.760 | They need a buyer.

00:32:06.160 | And you're basically saying,

00:32:07.000 | "Listen, I'm one of the few buyers that's out there

00:32:09.040 | that could do this thing,

00:32:09.880 | but if you want my business,

00:32:11.560 | you're gonna have to make it worth my while."

00:32:13.320 | That works a lot better than in a market like today

00:32:15.720 | where you're just one out of a whole bunch of other people

00:32:18.560 | that are all struggling to try to get a house.

00:32:20.400 | Yeah, I'm actually really glad you asked that, Chris.

00:32:22.440 | And I'm glad you clarified, David,

00:32:23.640 | because Chris, for reference,

00:32:25.480 | I'm in about 16 different markets around the country.

00:32:28.040 | So I actually have a massive network of realtors

00:32:31.480 | in different cities.

00:32:32.600 | They're all very aware of exactly what I'm looking for.

00:32:35.120 | So when they get a pocket listing or an off-market listing,

00:32:37.800 | they text me directly.

00:32:39.200 | When I'm working in a city specifically

00:32:41.520 | or in a market specifically,

00:32:42.560 | I do want just one realtor.

00:32:44.080 | And that's why I say,

00:32:45.320 | I want to find a realtor that's got a lot of realtor friends

00:32:47.800 | that can help find some of those off-market deals.

00:32:50.400 | So it's about finding someone that's connected.

00:32:51.840 | Is that as simple as just seeing whose name pops up

00:32:54.080 | in a neighborhood most for sale signs?

00:32:56.600 | Like who represented most of the sales

00:32:58.360 | or any other tactics for finding that super connected agent?

00:33:02.240 | I see why it would look that way.

00:33:04.840 | But there are so many real estate agents, Chris.

00:33:07.560 | The ones you see are the tip of the iceberg.

00:33:10.000 | There's so many of them.

00:33:11.240 | There's way too many agents.

00:33:12.440 | We don't need this many.

00:33:13.840 | It reminds me of a scene in "The Office"

00:33:15.080 | where Dwight and Michael are walking

00:33:16.440 | through a crowded room and Dwight says,

00:33:18.280 | "There's too many people.

00:33:19.120 | We need another plague."

00:33:20.280 | There's just so many agents that have flooded

00:33:22.520 | into the real estate space.

00:33:23.600 | Like people coming to California in 1849,

00:33:25.840 | thinking they're going to strike gold.

00:33:27.280 | They're all fighting to try to get that seller

00:33:30.320 | to think of them.

00:33:31.160 | It's just this massive marketing campaign

00:33:33.520 | that every agent is throwing themselves

00:33:35.560 | in front of people.

00:33:37.000 | And now you've got investors that are also sending letters

00:33:39.880 | to those same people saying, "I want to buy your house.

00:33:41.920 | I want to buy your house."

00:33:43.200 | Most home sellers know in general,

00:33:46.240 | they have what everyone wants.

00:33:47.840 | Their home is valuable.

00:33:49.800 | You're probably not going to put things in your favor

00:33:52.080 | by just talking to every real estate agents out there

00:33:54.280 | and saying, "Hey, I want to buy a house if you get one."

00:33:56.400 | Because if they can get a listing, it's guaranteed to sell.

00:33:58.440 | There's no reason they're going to go to you particularly.

00:34:02.240 | And then this is a very short question, but it's important.

00:34:04.800 | How much does the brand behind the agent matter?

00:34:07.280 | Is it all about the agent or is it all about the agency

00:34:10.520 | they work at or the brokerage firm they work at?

00:34:13.000 | The only people that think a broker matters is the broker.

00:34:15.960 | Your clients never care who your broker is.

00:34:18.160 | It's 100% the agent.

00:34:19.640 | So if you're trying to find someone and they're like,

00:34:21.000 | "Oh, you can work with my colleague on this."

00:34:22.800 | That's like red flag.

00:34:24.480 | Big.

00:34:25.320 | It used to be really useful, just a little history lesson.

00:34:27.720 | Because there was a time where if you wanted to buy a house

00:34:30.840 | that RE/MAX was listing, you had to go to a RE/MAX agent

00:34:35.280 | at that office to buy that house.

00:34:37.200 | So RE/MAX had their listings.

00:34:38.720 | Coldwell Banker had theirs.

00:34:39.880 | Century 21 had theirs.

00:34:41.400 | And you would jump from broker to broker

00:34:43.440 | and look at their inventory.

00:34:44.960 | When we created the multiple listing service,

00:34:46.880 | this was an agreement between all brokerages

00:34:48.480 | that they would all put their listings

00:34:49.800 | into one central location that everybody could see,

00:34:52.480 | which eventually morphed into the online listing portals

00:34:55.160 | that we all see when we're looking for homes.

00:34:56.960 | That eliminated the value of going to an individual broker

00:35:00.080 | 'cause now you can see everybody's inventory

00:35:01.880 | in the same place.

00:35:03.160 | - And if people that you know had success

00:35:04.880 | using those online brokers that are like,

00:35:07.520 | "We're just gonna cut your rate

00:35:08.640 | "and give you huge discounts."

00:35:10.240 | I know Redfin does that.

00:35:11.520 | Have you heard success stories there?

00:35:13.000 | Is the savings worth it?

00:35:14.080 | - In our industry, Chris, I'm just gonna tell you

00:35:17.360 | the brutal truth.

00:35:18.960 | I look for a Redfin agent

00:35:21.320 | to be on the other side of the transaction

00:35:22.840 | because I know I'm gonna destroy them in negotiation.

00:35:25.800 | Because they don't make hardly any money on these deals.

00:35:28.060 | They usually go there when they're desperate for food.

00:35:30.660 | I'm starving, please Redfin give me some deals

00:35:33.640 | or whatever the discount brokerage is.

00:35:35.200 | I have had massive success,

00:35:36.840 | particularly targeting listings that are Redfin listings

00:35:39.560 | because those Redfin agents are not all the time.

00:35:42.880 | I'm sure there's gonna be a Redfin agent out there

00:35:44.640 | who's gonna say, "Well, I'm a Redfin agent and I'm good."

00:35:46.320 | Yes, they do exist.

00:35:47.280 | But in general, any of those discount brokerages.

00:35:50.400 | - I sell the most Redfin homes in this neighborhood.

00:35:54.600 | - Yeah, in fact, that might even be an advantage

00:35:56.720 | to tell people to look for those

00:35:58.380 | because your agent is going to have a field day

00:36:01.280 | with their agent if you have a good one.

00:36:03.320 | - Last tip, I got one more tip here.

00:36:04.840 | If the listing says, "Run, don't walk."

00:36:08.560 | It's probably not that great of a listing.

00:36:11.000 | - We were just talking about this yesterday.

00:36:14.040 | Every listing agent is putting that their house

00:36:16.020 | boasts of five bedrooms, boasts of amazing light,

00:36:19.360 | boasts of a great view.

00:36:20.800 | These houses are just boasting all over the place.

00:36:22.760 | Bay Area real estate has become very arrogant.

00:36:25.960 | They're very prideful homes.

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00:38:54.760 | I just wanna thank you quick

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00:39:00.160 | Your support is what keeps this show going.

00:39:02.980 | To get all of the URLs, codes, deals,

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00:39:14.380 | Let's say we find this house,

00:39:15.400 | whether it's a hot home,

00:39:16.860 | whether it's the home you're not sure about

00:39:18.260 | and you wanna rehab a little bit,

00:39:19.540 | what do you do when you've got someone

00:39:20.820 | and you're like, "I want this home,"

00:39:22.140 | or at least I wanna consider it,

00:39:23.740 | and you're going through that diligence process

00:39:25.420 | of trying to figure out, doing inspections.

00:39:27.940 | How do you optimize that part of the process

00:39:29.460 | to make sure you're getting the right home

00:39:31.180 | at the right price?

00:39:32.000 | First thing for uninitiated to understand,

00:39:34.260 | writing an offer is not a commitment to buy a house.

00:39:37.020 | A lot of people get stuck dragging their feet.

00:39:39.020 | They don't wanna write an offer.

00:39:39.920 | They need time to think about it.

00:39:41.120 | They need time to pray about it.

00:39:42.500 | They need time to talk to their mom.

00:39:43.760 | They need time to analyze it.

00:39:45.060 | By the time they get comfortable writing an offer,

00:39:46.620 | someone's already bought the house.

00:39:47.700 | This happens a lot of the time.

00:39:49.540 | When you write an offer,

00:39:50.820 | most of the time you will include a contingency,

00:39:53.660 | which is an allowance to back out of the deal

00:39:55.700 | and recover your earnest money deposit

00:39:57.620 | if you find something you don't like.

00:39:59.500 | The main three contingencies are inspection contingencies,

00:40:02.220 | appraisals, and loans.

00:40:03.620 | So if you can't get your loan,

00:40:04.740 | the house doesn't appraise at value,

00:40:06.180 | or something is revealed when you're inspecting the home,

00:40:08.640 | which can, in most cases, literally be,

00:40:10.380 | "I looked at the front lawn

00:40:11.460 | "and I didn't like the way the grass looked

00:40:13.020 | "when I inspected it.

00:40:14.180 | "I want out."

00:40:15.100 | You can use that contingency for just about anything.

00:40:17.940 | It's okay to rush to put a house in contract

00:40:20.000 | and then slow down when you're in contract

00:40:22.700 | and order your pest inspection,

00:40:24.180 | order your home inspection,

00:40:25.220 | order your pool inspection,

00:40:26.300 | order your roof inspection,

00:40:27.360 | whatever it is that you're looking to do.

00:40:29.300 | Take your time from that point,

00:40:30.780 | and if you decide you don't like the house,

00:40:32.260 | you want to back out, you can without penalty.

00:40:34.180 | - What about hot markets where there's no contingencies,

00:40:36.740 | or people are saying,

00:40:37.560 | "We're not accepting offers with contingencies."

00:40:39.500 | Are there secret contingencies you can kind of put in?

00:40:41.720 | Are there ways to get out?

00:40:42.700 | Or what do you think about those?

00:40:44.580 | - Oh man, you're going for the good stuff here.

00:40:46.380 | There's a couple, right?

00:40:47.260 | Here's a couple hacks that I'll share with you

00:40:49.060 | that normally you got to be my client

00:40:50.740 | if you want me to know this.

00:40:52.060 | There's a rule in California

00:40:53.820 | that once you receive the disclosures on a property,

00:40:56.540 | you have seven days to back out after receiving them.

00:40:59.620 | It gives you time as a buyer to review these disclosures.

00:41:02.620 | That is not a part of the contract that realtors use.

00:41:05.420 | That is a state law that cannot be waived in a contract.

00:41:09.460 | Many times, listing agents,

00:41:11.340 | because like I said, they're not all good.

00:41:13.140 | You get that discount agent,

00:41:14.300 | you get the person that hardly sells homes.

00:41:16.300 | They're arrogant, like,

00:41:17.140 | "Oh, I'm going to sell this thing

00:41:18.100 | because everybody wants my listing."

00:41:19.380 | But they don't know those little rules.

00:41:21.240 | So we've had times with our clients

00:41:22.980 | where the listing agent

00:41:23.820 | did not provide the disclosures up front.

00:41:26.420 | They just didn't have their clients fill them out.

00:41:27.900 | The clients didn't want to fill them out.

00:41:29.060 | They didn't know why they were important.

00:41:30.780 | If I see there's no disclosures,

00:41:32.100 | then they make me waive contingencies.

00:41:33.860 | I will put the house in contract,

00:41:35.780 | wait for them to give me those disclosures,

00:41:37.940 | and then the timeline starts.

00:41:39.220 | Try to remember if it's three days or seven days.

00:41:40.820 | I believe it's seven days.

00:41:42.100 | Anyway, we then have a period of time

00:41:45.100 | to decide if we want to move forward on that house.

00:41:47.800 | And we backed out and they said,

00:41:49.240 | "Well, you don't have an inspection contingency."

00:41:50.780 | We said, "Yeah, here's the disclosure law.

00:41:52.660 | There's nothing you could do about that."

00:41:54.020 | That's one loophole that we've looked for.

00:41:56.380 | - That's good.

00:41:57.820 | You dirty dog.

00:41:59.380 | Everybody go back 30 seconds and listen to that again.

00:42:01.980 | That is so good.

00:42:02.820 | I can see why you didn't want to necessarily

00:42:04.100 | say that on the podcast.

00:42:05.300 | You don't want people to know.

00:42:06.540 | - That's exactly right.

00:42:07.620 | And so when I'm selling homes as a listing agent,

00:42:10.420 | we have our people fill these disclosures out.

00:42:12.340 | And if you write an offer to buy the house,

00:42:14.180 | the first thing I do is say,

00:42:15.580 | "Review these before we even accept your offer."

00:42:18.460 | I want it to be signed that you've looked at them

00:42:20.540 | to start that timeline as fast as possible.

00:42:23.160 | I also, it's why I want people to come to me

00:42:24.760 | to be their agent.

00:42:25.600 | Because like I said, when you use an agent

00:42:27.180 | that doesn't sell a lot of homes, they don't know that.

00:42:29.580 | And even more importantly, I know that they don't know.

00:42:33.220 | And when I sense that as the agent,

00:42:34.900 | that's where I start shifting everything

00:42:36.580 | to protect my client.

00:42:37.540 | Another one that people don't think about,

00:42:39.580 | usually when you buy a house,

00:42:40.940 | you have a period of time to send in

00:42:42.500 | your earnest money deposit.

00:42:44.620 | So there are certain times where there's two houses

00:42:46.900 | and you like them both,

00:42:47.780 | and you don't know if you're gonna get one.

00:42:48.860 | So you write offers on both houses,

00:42:50.360 | and then you get lucky and end up with two of them.

00:42:52.660 | What am I gonna do now, right?

00:42:54.540 | Well, if you don't send the earnest money deposit in

00:42:57.140 | and you cancel the contract,

00:42:58.260 | there's really no recourse that the seller has

00:43:00.460 | to come back after you and say,

00:43:02.200 | "No, you have to give me money for this."

00:43:04.660 | There is no money in the escrow to take out.

00:43:07.420 | So when you're a buyer,

00:43:08.540 | either put a longer period of time

00:43:10.300 | before you have to put in your earnest money

00:43:11.780 | and use that time to do your inspections,

00:43:13.580 | do your praying, talk to your mom,

00:43:14.940 | go through your due diligence.

00:43:17.060 | Or in some cases, I will admit,

00:43:19.180 | I bought houses out of state and the listing agent

00:43:22.160 | and the escrow company literally did not ever check

00:43:25.700 | to see if I sent the earnest money in.

00:43:27.840 | I've closed on several houses in Tennessee

00:43:29.940 | that I never sent the earnest money for the entire escrow.

00:43:33.220 | And nobody even asked about it.

00:43:35.660 | I just sent the whole money in to close.

00:43:37.700 | And I was fascinated that that happened,

00:43:39.780 | but it probably happens in more markets than people think.

00:43:42.380 | Or with agents that aren't experienced selling houses

00:43:44.900 | like this hypothetical Redfin agent we talked about

00:43:47.100 | that doesn't even know they're supposed to check.

00:43:49.140 | You might make it 10, 12, 14 days

00:43:50.940 | before an escrow officer realizes,

00:43:53.140 | "Oh, we don't have earnest money."

00:43:54.740 | And they contact your client about looking into it,

00:43:56.500 | which is plenty of time to get some of those inspections

00:43:58.520 | done without a contingency.

00:44:00.220 | - I love that.

00:44:01.060 | And it's funny because I took that strategy

00:44:02.740 | we mentioned earlier where I used the seller's agent.

00:44:05.000 | And in fact, we made an offer

00:44:06.700 | and they set disclosures like two hours

00:44:09.380 | before we made the offer.

00:44:10.340 | It's like quick cursory glance.

00:44:12.620 | Fortunately, everything worked out,

00:44:14.020 | but I did not get reminded by the seller's agent

00:44:17.180 | that I might have some time to back out.

00:44:19.060 | And I think that's one of the risks

00:44:20.940 | when you use the seller's agent

00:44:22.820 | is that they might give you a little bit of the edge

00:44:25.160 | to try to get the deal done

00:44:26.320 | 'cause they might make a little bit more.

00:44:27.780 | Not at the risk of completely tanking

00:44:29.820 | the purchase price for their seller,

00:44:31.640 | but they're certainly not gonna try to come up

00:44:33.940 | with creative ways to save the deal and get you out.

00:44:37.620 | - Yeah, of course not.

00:44:38.700 | Those bros ain't loyal, not to you.

00:44:40.980 | - That's awesome.

00:44:41.820 | Any other things when you're going through inspections,

00:44:43.580 | things that people often miss, things that you learn?

00:44:46.340 | I feel like every time, and it's only happened two times,

00:44:48.620 | but every time I bought a home,

00:44:49.780 | like 30 days later, I'm like, "How did I miss that?"

00:44:52.900 | Any tips for finding all the that's?

00:44:55.340 | - (laughs) Yeah, sure.

00:44:56.340 | So I think one thing to keep in mind,

00:44:58.580 | and David kind of hit the nail on the head with this one,

00:45:00.500 | is if it's your goal to get into a property,

00:45:03.500 | get into escrow as fast as possible.

00:45:05.260 | I typically run two sets of analytics,

00:45:07.300 | especially with rental portfolios.

00:45:08.980 | I have my back of the napkin analytics,

00:45:11.340 | where I just wanna know, does this property feasibly work?

00:45:15.280 | If it kind of does, okay, great.

00:45:16.500 | I go into escrow,

00:45:17.700 | and then I run my deep dive analytics for that.

00:45:20.960 | The reason I say this is because a lot of people,

00:45:23.420 | like David said, will spend so much time

00:45:25.220 | just getting analysis paralysis,

00:45:27.060 | and then they'll lose out on the deal.

00:45:28.660 | One of those things that typically give me

00:45:30.260 | a lot of analysis paralysis back when I started

00:45:32.900 | was this little phrase in the listing that says,

00:45:34.940 | "As is, seller not willing to make any repairs

00:45:37.500 | to the property."

00:45:38.620 | And so that held me back from ever buying properties

00:45:40.860 | or ever making offers until I figured out

00:45:43.100 | that that really doesn't mean anything.

00:45:45.480 | Really, you can buy a property as is,

00:45:47.980 | but David, correct me if I'm wrong,

00:45:49.420 | there's no actual legal paperwork that is signed

00:45:52.360 | that says that you can't actually ask for concessions.

00:45:54.460 | 'Cause what's happened for me 100% of the time

00:45:57.300 | is I'll make the offer on an "as is" house,

00:46:00.860 | and then I get the inspection report,

00:46:02.500 | and guess what?

00:46:03.340 | I asked the seller for $10,000 worth of repairs

00:46:06.140 | or a $2,000 credit or whatever, right?

00:46:08.860 | So just because something says "as is"

00:46:11.820 | doesn't necessarily mean that you have to take

00:46:13.760 | that at face value.

00:46:14.700 | And that's something that I think a lot of people miss

00:46:16.560 | when they're buying their first or second or third property.

00:46:19.500 | 100% correct.

00:46:21.100 | I laugh in the face of "as is."

00:46:23.220 | It means nothing.

00:46:24.580 | Nothing!

00:46:25.540 | "As is" is a completely toothless claim.

00:46:28.780 | When someone says, "I'm selling my property as is,"

00:46:30.860 | what they're saying is,

00:46:31.700 | "I don't want to make any further concessions."

00:46:34.980 | But no seller wants to make concessions.

00:46:37.100 | It just doesn't matter anything.

00:46:39.660 | The only time someone could say, "I'm selling a house as is,"

00:46:42.860 | is if you have no contingencies

00:46:45.460 | and your earnest money deposit is so high

00:46:47.980 | that you would not want to back out of that deal.

00:46:50.760 | Because you could always back out of a deal,

00:46:52.420 | you'll just forfeit the earnest money

00:46:53.940 | and the seller will get to keep it.

00:46:55.460 | So let's say, Chris, you asked earlier,

00:46:57.180 | what if you just can't get contingencies?

00:46:59.660 | And all the things we've mentioned,

00:47:01.260 | you don't have any wiggle room.

00:47:02.740 | Well, what if you just make

00:47:03.580 | your earnest money deposit really low?

00:47:05.500 | Like, all right, no contingency, short escrow,

00:47:07.260 | I'll give you everything you want,

00:47:08.100 | $3,000 earnest money deposit.

00:47:10.300 | You find something you don't like in the house,

00:47:11.740 | worst case scenario, you lose three grand.

00:47:13.420 | No one loves it, but it's better than closing on a house

00:47:16.420 | that has a bunch of problems.

00:47:17.580 | So don't ever believe "as is."

00:47:19.820 | Rob and I bought a house together, actually.

00:47:21.380 | And he got to see behind the scenes

00:47:23.180 | of I was working the negotiation through our realtor.

00:47:26.460 | So it was like me telling Rob to tell our realtor,

00:47:28.500 | "Hey, say this."

00:47:29.660 | And he saw some of the angles and the experience

00:47:33.420 | that when you've been through these escrows, you develop.

00:47:36.540 | Sellers always start off with a hard stance.

00:47:38.540 | "I'm not taking less than three and a half million."

00:47:41.140 | And then three weeks, four weeks later,

00:47:42.540 | all of a sudden, three million

00:47:43.580 | is starting to look like a possibility.

00:47:45.100 | "I'm not giving them anything."

00:47:46.460 | Well, we get these inspection reports,

00:47:48.060 | and hey, your pool's got some issues,

00:47:49.500 | your landscaping has some issues,

00:47:50.860 | your roof has some issues.

00:47:52.220 | It's going to be $75,000 worth of work

00:47:54.420 | that needs to be done.

00:47:55.660 | You give them a week or two of sweating that out,

00:47:57.620 | they start to think a little bit differently.

00:47:59.540 | And so oftentimes when you're the buyer,

00:48:01.500 | you want to gather as much as you can

00:48:03.540 | about what's wrong with this property,

00:48:04.940 | present it to the sellers, and then wait.

00:48:07.380 | Let them marinate in their worry

00:48:09.260 | that you're going to back out of the deal

00:48:10.580 | or you're going to find something else,

00:48:12.180 | and they're going to have to give you concessions.

00:48:13.820 | The knee-jerk response is almost always, "No,

00:48:16.500 | I will not do it."

00:48:17.860 | But if you wait long enough,

00:48:18.980 | those nos frequently turn into yeses.

00:48:21.300 | So when I'm listing a house,

00:48:23.500 | I will have my client pay for a home inspection,

00:48:26.940 | which they never like doing because they're 500 bucks,

00:48:28.980 | but it saves you so much money, Chris.

00:48:30.820 | You would ask for other hacks when you're in escrow.

00:48:33.820 | Anytime there's a inspection that's done,

00:48:36.660 | the perspective is as crazy as this is,

00:48:38.940 | is the buyer's buying a house in perfect condition.

00:48:40.980 | And if anything's wrong with it,

00:48:42.220 | they deserve a credit or they deserve repairs.

00:48:44.180 | They deserve something to put this house back

00:48:46.500 | into perfect condition.

00:48:47.820 | Frequently, the house is in much better shape

00:48:49.700 | than other houses in the neighborhood,

00:48:50.860 | but they still use that inspection to get a discount.

00:48:53.900 | Short answer is if you are buying a house

00:48:56.500 | and it's not a situation where they have another buyer

00:48:58.940 | willing to pay more than you in backup position

00:49:00.740 | who's gonna jump right in there, anything absent that,

00:49:03.060 | you can ask for credits.

00:49:04.500 | You can get a significant chunk

00:49:06.140 | of your closing costs paid for by the seller.

00:49:08.300 | If you wait long enough into the escrow before you ask,

00:49:11.340 | almost regardless of the condition of the home.

00:49:13.140 | So when I'm selling houses,

00:49:14.720 | that's how I get people to waive the inspection contingency.

00:49:17.280 | You're gonna get a home inspection paid for.

00:49:19.180 | We're gonna give that to the buyer up front.

00:49:20.900 | We're gonna say, "Here's what it looks like.

00:49:22.220 | Here's all the reports.

00:49:23.060 | If you don't like it, find another house.

00:49:24.700 | But if you want this house,

00:49:25.660 | this is what you're buying

00:49:26.500 | and you're gonna waive those contingencies."

00:49:27.860 | So when you're selling, that's what you wanna do.

00:49:29.660 | When you're buying, you wanna avoid it.

00:49:31.140 | And then one practical thing to look for

00:49:33.280 | that everybody misses

00:49:34.660 | is what we call the sewer lateral connection.

00:49:36.900 | So there is a sewer line that runs from your home

00:49:39.700 | out to usually the sidewalk

00:49:41.100 | where it connects to the city sewer line.

00:49:43.500 | Those plumbing lines, if it's an older home,

00:49:47.740 | usually running through the front yard,

00:49:50.000 | can become infiltrated by tree roots.

00:49:52.260 | This is a crazy thing.

00:49:53.400 | But when the roots are just pushing against that PVC pipe

00:49:56.400 | for years, they will eventually push through there

00:49:59.460 | and then the roots will grow

00:50:00.940 | and these sewer lines can become clogged

00:50:02.980 | and they're very expensive to fix.

00:50:04.740 | So one thing I tell every home buyer who's trying,

00:50:07.340 | like, "What could I miss?

00:50:08.180 | What's that thing that I might've missed?"

00:50:10.300 | Get that sewer line scoped by a plumber

00:50:12.660 | before you buy the house, during your due diligence,

00:50:14.860 | and make sure that there aren't any clogs

00:50:16.580 | 'cause those things can be 10, 15 grand a fix

00:50:18.660 | when they get messed up.

00:50:20.500 | - Yeah, that did happen to me.

00:50:22.180 | We did a sewer scope.

00:50:23.800 | There was a problem with the sewer.

00:50:25.960 | They sent out the plumber to "fix the sewer."

00:50:29.480 | And we asked for the sewer scope

00:50:31.320 | like an hour before closing.

00:50:32.800 | And they're like, "Oh, we didn't do one."

00:50:34.400 | But everyone's hands were sort of tied.

00:50:36.040 | It was December 31st.

00:50:37.480 | We were all trying to close that year.

00:50:39.280 | It was gonna mess everybody up.

00:50:40.960 | So we were just like, "All right.

00:50:42.040 | Well, I mean, if they fixed it,

00:50:43.120 | then in theory we should be good."

00:50:44.960 | My wife moved in with our two kids.

00:50:46.960 | And then that week,

00:50:48.560 | ramen noodles and poop show up in our bathtub.

00:50:50.880 | And it was a whole thing.

00:50:52.600 | And so lawyers got involved and it was a whole thing.

00:50:56.160 | And basically what happened was the seller's agent

00:50:59.160 | lied to us about the repair

00:51:00.720 | and basically never even told the plumber kind of thing.

00:51:03.400 | And so because we didn't get it re-scoped

00:51:06.120 | and while we didn't do it while they owned it,

00:51:07.880 | it became a whole problem for us.

00:51:09.480 | So I would say from a sewer scope standpoint,

00:51:12.720 | if you do have to make repairs,

00:51:14.040 | make sure you pay for two sewer scopes.

00:51:16.920 | - What do you guys think about inspections

00:51:18.480 | when the seller's already done the inspections

00:51:20.720 | and they're in the disclosures?

00:51:21.880 | I remember when we bought this house,

00:51:23.280 | the disclosures were like,

00:51:24.120 | "Here's the building report.

00:51:25.680 | Here's the roof inspection.

00:51:26.960 | Here's the termite inspection."

00:51:28.360 | They were all there.

00:51:29.680 | Do you still recommend people go do them themselves also?

00:51:33.000 | - Usually not.

00:51:33.880 | The fear is, well, that's the seller's inspector.

00:51:36.560 | But the inspectors themselves are licensed professionals

00:51:39.440 | that don't really care who the seller is,

00:51:41.320 | who the buyer is.

00:51:42.160 | They just wanna make sure they don't miss anything

00:51:43.360 | so they don't get sued.

00:51:44.760 | So what I tell my clients

00:51:45.800 | when you're getting inspections someone else has done

00:51:47.880 | is call the home inspector

00:51:49.440 | and ask them, you can actually do that,

00:51:51.720 | especially if you're the one who pays for the inspection.

00:51:53.600 | But even if you're not,

00:51:54.520 | "Hey, I see in your inspection line 9C2 shows this.

00:51:59.400 | Is that something I should be worried about?"

00:52:01.080 | You get great information from home inspectors.

00:52:03.600 | They give you the context that's often missing,

00:52:05.560 | especially 'cause when you're first buying a house

00:52:07.680 | or even if you've owned a lot of houses,

00:52:09.080 | Rob, you could probably admit,

00:52:10.000 | we don't know what a lot of that stuff means.

00:52:12.640 | You see a report and it lists something,

00:52:14.200 | you're like, "Well, is that a bad thing

00:52:15.320 | or not a bad thing?"

00:52:16.440 | Just ask them, "Do you see this very frequently?

00:52:18.400 | Oh yeah, every house has that issue

00:52:20.000 | with the trusses in the attic or whatever the cases are."

00:52:22.920 | No, that's very concerning.

00:52:24.560 | That electrical system should not be wired that way.

00:52:27.040 | I rarely ever see that.

00:52:28.680 | That's a big problem.

00:52:30.040 | So having those conversations with the person

00:52:31.920 | that inspected the house and then specifically asking,

00:52:34.920 | is this a common problem or is this concerning to you?

00:52:37.800 | Or maybe when you looked at the house,

00:52:39.760 | what stuff from this report stood out to you

00:52:42.480 | in your experience?

00:52:43.320 | Now you're getting 20 years of experience

00:52:45.480 | so that home inspector's perspective benefiting you

00:52:48.840 | as a person buying the house.

00:52:50.600 | I'm gonna rapid fire through a few things quick

00:52:52.680 | that I've done in this part of the process.

00:52:54.760 | One, we did get an inspection

00:52:56.320 | that said that there were termites.

00:52:57.640 | I got another inspection and found someone

00:52:59.760 | that was willing to crawl through a smaller hole

00:53:01.920 | than the original inspector was

00:53:03.680 | to figure out what was wrong and find local treatment

00:53:06.600 | that was gonna be less expensive.

00:53:07.760 | So I think anytime an inspection reveals something

00:53:10.440 | that could be expensive,

00:53:11.480 | it could be worth doing a second one.

00:53:13.480 | Another one is, I'm trying to figure out

00:53:16.080 | when we're trying to buy a home,

00:53:17.200 | what the person cares about.

00:53:18.960 | Because sometimes there's sellers

00:53:20.560 | that really just wanna close fast.

00:53:22.320 | Some want the most money.

00:53:23.920 | Sometimes someone might just wanna make sure

00:53:26.080 | that the house is gonna be taken care of by a good family.

00:53:28.960 | I find that if I could figure that out,

00:53:30.680 | either through the agent or some other way,

00:53:33.000 | maybe from some neighbors.

00:53:34.480 | Sometimes we ask the neighbors about the sellers.

00:53:37.080 | You could try to optimize what you're doing.

00:53:38.800 | 'Cause if you know what's important to them,

00:53:40.080 | if they care about fast close,

00:53:41.720 | then maybe that's the thing you optimize for.

00:53:44.440 | My brother-in-law's tip was always,

00:53:46.360 | it's a lot easier to extend a fast close than you think.

00:53:48.920 | So if you say we're gonna close in 30 days,

00:53:50.640 | you need to push it back by day 30.

00:53:52.680 | It's a lot easier.

00:53:54.000 | I'm gonna throw a couple little things

00:53:55.480 | that I've thrown in contracts

00:53:56.960 | or learned and regretted not doing.

00:53:59.120 | I'm curious if there are any last things

00:54:00.440 | that you try to negotiate for.

00:54:01.520 | For me, I always had this rule when I bought a car

00:54:03.480 | that's like try to get them to throw in the floor mats.

00:54:05.800 | And for the home,

00:54:06.920 | I always love getting a little extra at the end of the deal

00:54:09.760 | because you're looking at a house

00:54:11.160 | that the cost to throw in a few things is so small

00:54:13.520 | that even if someone's not willing to negotiate,

00:54:15.880 | you could sometimes get it.

00:54:16.920 | So we got all the lime trees

00:54:18.920 | that were technically staging included in our house.

00:54:21.520 | There was a nice stage TV in the living room.

00:54:23.720 | We got that thrown in.

00:54:24.720 | So I always like to throw in a little bit

00:54:26.880 | of few small things that at the end of the day,

00:54:29.080 | no one's gonna kind of blow a deal up over something small,

00:54:32.160 | but it feels really good.

00:54:33.200 | Every time we walk through our living room,

00:54:34.880 | I'm like, I didn't pay for that TV.

00:54:36.240 | Like that TV was free.

00:54:37.720 | Yeah, I paid for the TV.

00:54:38.720 | I bought the house,

00:54:39.560 | but I feel like I didn't pay for the TV.

00:54:41.800 | And one that I've recently come across.

00:54:43.800 | So depending on how much you care about privacy and whatnot,

00:54:47.480 | I'm now in a situation

00:54:48.600 | where I'd prefer the whole world doesn't know where I live.

00:54:50.960 | So one thing that you can do in advance,

00:54:54.080 | because it's a lot of work if you don't,

00:54:55.560 | is put into the contract

00:54:57.040 | that the agent needs to remove all of the home data,

00:55:00.160 | photos, descriptions from the MLS.

00:55:02.800 | Sometimes it can be a hassle

00:55:04.240 | to get them to go do it after the fact.

00:55:06.160 | But if you don't want all the pictures

00:55:07.520 | of the interior house online,

00:55:09.280 | you can write that into a contract,

00:55:10.680 | which is something that took me time,

00:55:12.760 | but I didn't do it in advance.

00:55:13.680 | And if you really wanna be private

00:55:15.440 | and you wanna buy a home in an LLC

00:55:17.880 | so that you kind of protect your identity where you are,

00:55:20.680 | you can't do that later.

00:55:21.840 | Like the records will always be there

00:55:23.360 | if you didn't do that in advance.

00:55:24.600 | So if you're in a situation where you think one day

00:55:27.280 | in the near future,

00:55:28.120 | you might not want people to find your address,

00:55:30.440 | buy the home in the LLC in advance.

00:55:32.240 | Don't try to change that after the fact.

00:55:33.560 | 'Cause I have at least one friend

00:55:34.720 | who ended up just having to move

00:55:35.920 | because someone knew where his address was

00:55:37.800 | and there wasn't really anything he could do at that point.

00:55:39.960 | So those are a couple of mine.

00:55:41.160 | Any other small, quick wins

00:55:43.120 | that you can get when you're negotiating?

00:55:44.680 | We talked about seller credits.

00:55:45.800 | I think it's important to note

00:55:47.280 | that you can have a little bit of flexibility

00:55:49.800 | with seller credits.

00:55:50.720 | Like let's say you can't see eye to eye with the seller

00:55:53.400 | and they don't wanna give you a $5,000 seller credit

00:55:56.040 | to repair this one kind of thing

00:55:57.800 | that you think is a big deal.

00:55:59.520 | You could, in theory, raise the price by $5,000

00:56:02.400 | and then have them give you a credit for $5,000.

00:56:05.000 | And while they're not paying it for you,

00:56:07.480 | throwing that onto your mortgage

00:56:09.320 | is really gonna have a pretty minimal effect

00:56:11.200 | on your overall payment.

00:56:12.320 | I mean, probably less than a dollar is my guess.

00:56:14.720 | I don't really know.

00:56:15.560 | But that's always something you can do too

00:56:17.160 | if you need to make a deal work

00:56:18.760 | and you're really like,

00:56:19.600 | "Hey, this $5,000 is gonna kill the deal."

00:56:22.120 | You can always add it to the price of the house

00:56:23.460 | if you feel like you're getting a good enough deal.

00:56:25.160 | That's a good strategy,

00:56:26.120 | especially if you don't have a ton of capital.

00:56:27.840 | In general, having 5, 10, 15 grand in the bank

00:56:30.640 | is more value to you than having 5, 10, or 15 grand

00:56:33.360 | added onto a $600,000 mortgage balance.

00:56:37.320 | When it comes to extras that you mentioned, Chris,

00:56:39.880 | one of the best things to do is to have your agent

00:56:41.880 | ask the listing agent,

00:56:43.120 | "Is there anything that the sellers

00:56:44.560 | don't wanna have to move?"

00:56:46.400 | You wouldn't think that would be a common thing,

00:56:49.040 | but many times, sellers, their biggest concern is,

00:56:51.880 | "I don't wanna move all my crap."

00:56:53.680 | And if they don't wanna take the bunk beds with them,

00:56:56.060 | or they have some patio furniture in the backyard

00:56:58.200 | that they were planning on replacing

00:56:59.800 | when they got something new,

00:57:00.880 | or they don't really love their couch,

00:57:02.600 | it's not worth moving

00:57:03.800 | because they're gonna have to spend a bunch of money

00:57:05.180 | to get it from one place to another,

00:57:06.920 | they may be happy to leave it for you.

00:57:09.240 | So just getting a list from them,

00:57:10.780 | or what are all the things you don't wanna take

00:57:12.540 | regarding furniture or stuff like that,

00:57:15.000 | is something that you can get added.

00:57:17.720 | Like what you mentioned, Chris,

00:57:19.080 | sometimes there's TVs that they were just gonna get

00:57:21.600 | a new TV when they got to the new house,

00:57:23.240 | and you can have that added,

00:57:24.800 | and just end up with some extra things

00:57:26.520 | to throw throughout the house.

00:57:27.600 | Doesn't hurt to ask.

00:57:28.780 | - Love that.

00:57:29.620 | Rob, you talked about mortgages.

00:57:30.460 | Let's talk quickly about financing.

00:57:32.280 | I know it's a big thing.

00:57:33.620 | Anything people need to be thinking about

00:57:35.320 | as they go through this process,

00:57:36.600 | getting a loan, getting pre-qualified,

00:57:39.080 | figuring out what they can afford?

00:57:40.560 | - There's a couple ways to look at it, right?

00:57:41.920 | So if you're buying conventionally,

00:57:43.280 | they're typically gonna look at

00:57:44.440 | what's called your debt to income ratio.

00:57:46.560 | So this is how much money you're paying

00:57:48.000 | every single month to debt servicers

00:57:49.880 | versus how much income you make.

00:57:51.560 | Now, I believe this is gross income.

00:57:53.120 | So let's say you make $10,000 a month,

00:57:56.000 | but all of your credit cards and your student loan payments

00:57:58.800 | and your car payments and the couch that you finance

00:58:01.680 | adds up to 4,500 bucks a month.

00:58:03.820 | That means that your debt to income ratio is 45%.

00:58:07.600 | And David, you probably know the exact number here,

00:58:10.200 | but typically, lenders don't want you to have

00:58:12.600 | higher than a 45% DTI to make a deal work.

00:58:16.220 | Is that the correct figure, David?

00:58:17.920 | - It's sometimes lower than that.

00:58:19.160 | That's like the ceiling as high as most of them will go.

00:58:21.600 | - Yeah.

00:58:22.440 | So you wanna make sure that when you're analyzing a deal

00:58:24.240 | and seeing what you can qualify for,

00:58:25.900 | I mean, all lenders are basically gonna run

00:58:27.680 | this calculation for you.

00:58:29.420 | But just to put it into perspective,

00:58:31.540 | you don't want the payment of the house that you're buying

00:58:34.360 | to throw your DTI out of whack, right?

00:58:36.960 | If you're barely qualifying now,

00:58:38.760 | the debt that you're gonna have

00:58:39.980 | from the house that you're buying

00:58:41.520 | contributes to that DTI and what you're qualifying for.

00:58:44.120 | So make sure that that's something

00:58:45.980 | that you can hone in ahead of time.

00:58:48.200 | And certainly don't go take out new credit cards

00:58:50.440 | and fill them up to buy new furniture before you close.

00:58:53.360 | That's a big mistake that I think a lot of people make

00:58:55.680 | on their first property.

00:58:57.340 | - Yeah.

00:58:58.180 | Opening any line of credit

00:58:59.020 | is gonna screw up your debt to income ratio.

00:59:00.840 | And it often happens once the house is an escrow.

00:59:03.400 | Now let's buy a new car to drive into our new garage.

00:59:06.060 | Let's go open a line of credits to buy a bunch of furniture.

00:59:08.200 | You're so excited.

00:59:09.120 | And then the entire escrow gets blown up

00:59:11.200 | because you were just at the peak

00:59:12.800 | of what you could afford

00:59:13.640 | if that new line of credit put you over.

00:59:15.560 | - I'm a big fan of the points game

00:59:17.080 | and opening up cards and sign up bonuses.

00:59:18.800 | But when we're buying a home,

00:59:19.800 | it's like, let's put a hold on all of that six months out

00:59:23.240 | just so I kind of have a nice clean slate there.

00:59:25.880 | And I'm not trying to take on any extra inquiries

00:59:28.000 | or anything like that.

00:59:29.240 | - When you're helping people find homes

00:59:30.680 | or looking for mortgages yourself,

00:59:32.160 | do you think a broker

00:59:33.240 | is an important part of that equation or not?

00:59:35.240 | It's something I've never actually worked with.

00:59:37.520 | I've always gone direct

00:59:38.480 | to a handful of financial institutions.

00:59:40.440 | - Yeah, and disclaimer, I am a mortgage broker,

00:59:43.000 | so I am partial towards them.

00:59:44.940 | But here's why I went that route

00:59:46.480 | instead of becoming what we call direct lender.

00:59:48.260 | So what a lot of people do is they'll go to Wells Fargo,

00:59:50.200 | they'll go to Chase, they'll go to Bank of America,

00:59:52.840 | and they'll say, "What can you do?

00:59:54.080 | What's your rate?

00:59:54.920 | What are your closing costs?"

00:59:55.740 | And it gives you this feeling of productivity

00:59:57.100 | that you're out there shopping around.

00:59:58.780 | But as a broker, we're doing the same thing.

01:00:01.040 | We're going to Bank of America, we're going to Chase,

01:00:02.960 | we're going to all the same lenders you have,

01:00:04.940 | but they're probably giving us better pricing than you.

01:00:07.640 | And this is one of the shady things

01:00:10.160 | about how the loan industry works.

01:00:11.840 | When you walk into Bank of America,

01:00:13.600 | 'cause that's where you bank and you know them

01:00:15.280 | and you're comfortable with them,

01:00:16.640 | they know that you're gonna bank with them

01:00:18.320 | because you're comfortable.

01:00:19.200 | They don't have to give you the best deal.

01:00:20.960 | But when they're working with a broker,

01:00:22.840 | they know that we are comparing them

01:00:24.440 | to all the other lending options,

01:00:25.760 | so they're gonna have to give us a good deal

01:00:27.580 | to get the business.

01:00:28.640 | So going to a broker, it will allow you to have them shop

01:00:32.240 | for all your different loan products

01:00:33.640 | and options that are available, save you time,

01:00:35.280 | and they're usually gonna get better pricing.

01:00:37.320 | - Can a broker still get deals where they're required

01:00:40.680 | to put a certain amount of assets at that institution?

01:00:42.760 | I know, at least with Wells Fargo, as your example,

01:00:45.500 | if you move some money into a brokerage account

01:00:47.080 | with Wells Fargo, you get a better rate.

01:00:48.560 | Do brokers still negotiate those kinds of deals as well?

01:00:51.280 | - Those are uncommon now.

01:00:52.800 | We were seeing those with jumbo loans.

01:00:54.480 | There was a time where you could get a better rate

01:00:56.080 | on a jumbo loan if you put a significant amount of money

01:00:58.440 | in with the bank.

01:00:59.720 | And we would just tell our clients like,

01:01:00.960 | "Hey, if you're looking for a jumbo loan in this market,"

01:01:03.200 | it's not the case right now, but at the time,

01:01:04.560 | especially during COVID,

01:01:05.960 | you're better off just to go to that bank.

01:01:07.600 | You're gonna get a better rate on jumbo products

01:01:09.720 | than you would be right here.

01:01:10.560 | But you're gonna have to put 100 grand in a bank.

01:01:12.680 | They're gonna schedule a meeting for you

01:01:13.900 | with one of their financial advisors

01:01:15.200 | 'cause they want you to take that 100 grand

01:01:16.640 | and go buy mutual funds through them

01:01:18.000 | and they're gonna make money that way.

01:01:19.740 | So if you get an honest broker,

01:01:21.720 | we don't wanna waste our time working on somebody

01:01:24.320 | who we can't get them a good loan product.

01:01:26.040 | We're pretty good at just telling people upfront,

01:01:28.360 | "For what you wanna do, we don't have a product like that."

01:01:31.240 | For years, we didn't do commercial lending.

01:01:33.120 | So we would refer people

01:01:34.080 | to the best commercial lender we knew

01:01:35.760 | until we got set up with a commercial lender

01:01:37.520 | and now we can do it.

01:01:38.340 | So if you do have one of those special opportunities,

01:01:42.080 | sometimes physicians can get special loans

01:01:44.600 | through a credit union that is geared towards physicians.

01:01:47.600 | Yes, there's an angle, but for your average person,

01:01:50.680 | there's not a ton of those opportunities.

01:01:52.380 | - And David, just for reference,

01:01:53.680 | what makes something a jumbo loan?

01:01:56.240 | - Yeah, that's a good point.

01:01:57.240 | Every area has a difference,

01:01:59.000 | what they call it like a conforming limit.

01:02:00.780 | This is how much you can borrow

01:02:02.060 | before it's considered to be risky.

01:02:03.840 | A mortgage broker or a loan officer can tell you

01:02:06.100 | what the Fannie Mae, Freddie Mac guidelines are

01:02:08.440 | for that area.

01:02:09.260 | You might even be able to look that up online.

01:02:10.960 | But a loan balance above a certain amount,

01:02:13.080 | it's obviously higher in the Bay Area, California,

01:02:15.480 | than it's gonna be in Topeka, Kansas.

01:02:17.680 | But it's a proportional amount.

01:02:19.160 | And then once you have to get a loan balance

01:02:21.780 | higher than that,

01:02:22.620 | you're not gonna get a Fannie Mae, Freddie Mac loan,

01:02:24.760 | you're gonna get a loan that comes from private investors

01:02:27.240 | that have pooled their money in capital markets.

01:02:29.640 | They're going to give you the loan,

01:02:30.640 | then they're going to sell that

01:02:31.600 | as a mortgage-backed security somewhere else.

01:02:33.280 | So that's why the rates are usually a little bit higher

01:02:35.020 | on jumbo loans.

01:02:35.860 | They're riskier for the person lending you the money.

01:02:38.760 | - I think in the Bay Area,

01:02:39.600 | it's like high six figures is the threshold, I think.

01:02:43.520 | - Yeah, it goes up every year, usually, too.

01:02:45.480 | - Okay, yeah, it's been a few years for me.

01:02:47.360 | And how do you think about

01:02:48.200 | how much people should be putting down?

01:02:49.600 | - I think it's gonna probably depend

01:02:50.680 | on the use case, right?

01:02:52.160 | So if it's a primary, you can get into a primary

01:02:54.760 | for as low as 3.5% down.

01:02:56.920 | Unless it's a jumbo loan, I don't think you can do that.

01:02:59.100 | There are limits on those as well,

01:03:00.520 | the FHA Fannie Mae guidelines.

01:03:02.000 | So make sure to look those up.

01:03:02.960 | Those are pretty easy to look up.

01:03:04.560 | I think it's totally fine

01:03:05.400 | to get into your starter home for 3.5%.

01:03:07.680 | I did.

01:03:08.520 | I got into my first $159,000 house for like six or seven grand.

01:03:12.880 | That house ended up being the catalyst

01:03:15.480 | for my entire portfolio.

01:03:17.120 | I think if you're looking at investment properties,

01:03:19.600 | you could go as low as 10% with a second home loan.

01:03:22.560 | That's still gonna be under your name

01:03:24.180 | and your income and everything like that.

01:03:25.960 | And then once you go that traditional route,

01:03:27.520 | if you're going more traditional real estate,

01:03:29.880 | 20% down seems to be the gold standard.

01:03:32.680 | Sometimes it's gonna be asked that you do 25%.

01:03:35.680 | Not really a fan of putting 25% down personally.

01:03:39.080 | If I can get in for 10% on a second home loan, pretty happy.

01:03:42.600 | I'll do 20% though on an investment loan.

01:03:45.340 | That seems to be more common these days.

01:03:47.260 | So I like to put that into an apples to apples comparison.

01:03:49.720 | In general, if you're an investor

01:03:52.680 | or a real estate investor, having more capital is better,

01:03:56.180 | but it depends where interest rates are.

01:03:57.500 | So for example, when rates are at 6%,

01:04:00.720 | to save an extra $40,000

01:04:03.180 | and put that towards your down payment

01:04:04.600 | is gonna save you $240 a month.

01:04:07.600 | When rates were at 3%, it would only save you $169 a month.

01:04:12.600 | So we saw this phenomenon

01:04:14.640 | where people were trying to save more money

01:04:16.220 | to get their payment lower, get their payment lower,

01:04:18.360 | but prices were rising faster than they could save money.

01:04:21.340 | It actually ended up being a poor financial decision

01:04:23.940 | to try to save more money to put money down.

01:04:26.300 | So if rates jump up to say 12%,

01:04:30.020 | now you're talking about $411 a month.

01:04:32.740 | That might make sense to put more money down,

01:04:34.880 | but interest rates, though, they're higher than they were.

01:04:37.060 | They are still traditionally very low

01:04:39.940 | compared to where they've been for a long time.

01:04:41.620 | So putting more money down

01:04:42.660 | doesn't help you as much as you'd think.

01:04:44.660 | Up to $750,000 of mortgage interest

01:04:47.700 | deductible as a primary residence.

01:04:49.820 | So that mortgage interest comes off

01:04:51.780 | a little bit in your tax return.

01:04:52.940 | Obviously, I'm not an accountant.

01:04:54.100 | Feel free to talk to a CPA.

01:04:55.820 | And then a hack for anyone who's making large purchases

01:04:58.860 | and has lots of money that isn't talked about too often,

01:05:01.700 | but I'll share on the personal side is that

01:05:04.740 | if you borrow money and you use that money to invest

01:05:07.960 | in anything, whether it's stock market, bonds, whatever,

01:05:11.700 | that interest is deductible as investment interest expense.

01:05:14.180 | Again, not a CPA, talk to your lawyer.

01:05:16.460 | I'll put a link in the show notes.

01:05:17.780 | So I know people that have been able to buy a house in cash

01:05:21.660 | and then do the mortgage a day later,

01:05:24.900 | and then take that mortgage and invest it.

01:05:26.980 | One thing we did to kind of do this strategy a little bit

01:05:29.740 | was we liquidated a lot of our personal investment savings,

01:05:33.620 | bought more of the house than we could,

01:05:35.780 | and then immediately financed more of it

01:05:37.540 | and put that money back in our investment account.

01:05:40.420 | And by doing that,

01:05:41.700 | we could go over the deductible mortgage interest limit

01:05:45.120 | because that extra mortgage interest

01:05:47.220 | was actually being classified as investment interest

01:05:49.780 | because it was being used for the purpose of investing.

01:05:51.820 | So I'm not gonna go down that rabbit hole,

01:05:54.440 | but I know people who have multi-million dollar mortgages

01:05:57.660 | that are 100% deductible.

01:05:59.260 | And you could deduct that interest against

01:06:01.260 | investment returns and investment gains,

01:06:03.100 | whether it's capital gains or interest income

01:06:04.740 | or anything like that.

01:06:05.740 | There's also a ton of awesome tax hacks

01:06:07.900 | when it comes to commercial property.

01:06:09.540 | I know you guys did an episode all about the way

01:06:12.420 | to do real estate and not pay taxes

01:06:14.960 | when you're doing it for investment properties.

01:06:16.860 | I don't remember the episode number,

01:06:17.980 | but we'll link to it in the show notes for sure,

01:06:19.660 | because I know you guys have gone deep on that

01:06:21.240 | on the commercial side.

01:06:22.140 | But there is a hack here if you have cash on hand,

01:06:24.860 | or even if your house is appreciated and you have equity,

01:06:28.140 | you can refinance, take cash out of your house.

01:06:31.300 | And as long as you invest that cash out refinance money,

01:06:34.460 | that extra mortgage interest will also be,

01:06:37.100 | usually, talked to your CPA,

01:06:38.660 | classified as investment interest expense and be deductible.

01:06:41.180 | Yeah, you can write off the interest

01:06:42.380 | and you don't get taxed on the money that you took out.

01:06:44.980 | I will say, I actually remember the episode

01:06:46.940 | off the top of my head.

01:06:47.820 | I have every single episode memorized.

01:06:49.620 | It was 689, our BiggerPockets episode with Matt Bontrager,

01:06:53.900 | who is an awesome CPA.

01:06:55.820 | So there's probably a lot more we could do.

01:06:57.620 | I could, in fact, probably do an entire episode

01:06:59.500 | on each one of these topics we went to.

01:07:01.460 | Maybe that's the follow-up is we have a series

01:07:03.380 | of extra deeper, deeper dives on each one.

01:07:06.140 | Any last things that you need to be thinking about?

01:07:07.860 | We made an offer.

01:07:08.900 | We secured our loan.

01:07:10.340 | As we're wrapping up the process of buying a home,

01:07:12.300 | is there anything else there?

01:07:13.300 | Or is it really just closes and that's all that happens?

01:07:15.940 | David, you gave a very good tip the other day

01:07:18.380 | about keeping your documents into one place.

01:07:20.740 | You think you could run us through that?

01:07:21.780 | 'Cause when you said it, I was like, "Oh my God."

01:07:23.900 | It's so easy.

01:07:24.740 | Why doesn't everyone do this

01:07:25.860 | before they apply for a mortgage?

01:07:27.940 | So when you're getting ready

01:07:28.780 | to buy a house in the first place,

01:07:30.220 | a lot of people hate the pre-approval process.

01:07:32.100 | It's like pulling teeth.

01:07:32.940 | You have to go get your pay stubs.

01:07:34.380 | You have to get bank statements.

01:07:35.820 | You have to find your tax returns.

01:07:37.500 | Well, who knows where their tax returns are most of the time?

01:07:40.020 | And if you're not used to navigating

01:07:41.540 | your company's HR website to get pay stubs,

01:07:43.740 | it can take three hours to figure that thing out.

01:07:45.740 | It's very frustrating.

01:07:47.100 | So the advice that I give to all of our clients

01:07:48.940 | and what I do myself is I create a Google folder

01:07:51.700 | in Google Drive with that information.

01:07:54.420 | When I download those documents, I stick it in that folder.

01:07:57.260 | And that way, if you decide that you wanna get pre-approved

01:07:59.300 | with several different lenders,

01:08:00.220 | if you're gonna use the method like Chris was saying,

01:08:01.820 | where you're talking to different people,

01:08:03.060 | you're sending the same stuff to everybody.

01:08:04.540 | It's really easy.

01:08:05.740 | Then when I close on a house,

01:08:07.300 | I open another Google Drive folder for every address

01:08:10.380 | and I keep all the information

01:08:12.180 | for every house in that folder.

01:08:14.420 | It is incredibly simple when you do it.

01:08:16.580 | So we get our loan documents.

01:08:17.900 | I stick it in there.

01:08:18.740 | All the inspection reports, I stick it in there.

01:08:21.020 | The disclosures for the house, they're gonna go in there.

01:08:23.420 | The mortgage note, every piece of information,

01:08:25.980 | the property management agreement,

01:08:27.260 | if I'm gonna manage the property,

01:08:28.540 | the work from the contractor,

01:08:29.980 | the scope of work and how much I paid them.

01:08:32.020 | Whatever it is, it all goes in that same folder.

01:08:34.540 | And then if I ever need it,

01:08:35.540 | I know exactly where to go to get it.

01:08:37.060 | - I love that.

01:08:37.900 | I did not do that with the first house.

01:08:39.540 | And you had to go back and track down the mortgage docs.

01:08:41.740 | And I was surprised that just because you sign

01:08:44.100 | a lot of these mortgage docs in person,

01:08:45.820 | I didn't get a copy without requesting them

01:08:48.260 | as an attachment in my email.

01:08:49.740 | It was in some secure thing that wasn't easy to access.

01:08:52.700 | That's one.

01:08:53.540 | And then the last other thing I put in that folder.

01:08:54.820 | So now I have that folder.

01:08:56.260 | I would say, put a Google sheet in that folder,

01:08:58.980 | Excel file, whatever.

01:09:00.060 | And every time you make any expenditures

01:09:02.780 | to improve the house, make sure you write it down.

01:09:05.420 | Because we just did a renovation

01:09:07.260 | and that kind of sparked this idea.

01:09:09.020 | But at the end of the tenure at a house,

01:09:11.540 | when you sell it,

01:09:12.380 | you take the amount that you made from the house selling it,

01:09:14.500 | you subtract the amount that you spent to buy it,

01:09:16.380 | and that's your kind of gain on the house.

01:09:18.260 | But you can deduct all the improvements

01:09:20.020 | you made to that house.

01:09:21.420 | And so it might seem small at the beginning,

01:09:23.700 | maybe you just redid some floors,

01:09:25.340 | but those things add up over the life of the house.

01:09:27.620 | And I think it's really helpful

01:09:28.740 | if just right as soon as you close,

01:09:30.220 | you have one place you can start to track

01:09:32.100 | every improvement and every expense you put

01:09:34.340 | to improve that house,

01:09:35.500 | so that you can save on the taxes at the end.

01:09:37.740 | - And if you ever wanna sell that house,

01:09:39.220 | that's something you can show

01:09:40.260 | the next buyers of the property.

01:09:41.620 | Here's all the improvements that we made

01:09:42.940 | over the time we had the home and here's the receipts.

01:09:45.300 | - Speaking of tracking all this stuff

01:09:46.940 | and storing documents,

01:09:48.100 | there's one thing after you buy this house

01:09:50.500 | that's very important,

01:09:51.460 | is to make sure you get that house insured.

01:09:53.180 | I just did a really deep dive on insurance.

01:09:55.460 | I went through every policy,

01:09:57.140 | talked to multiple brokers, multiple companies.

01:09:58.980 | I tracked a lot.

01:09:59.820 | I probably spent 50 hours on insurance.

01:10:02.100 | And I wanted to share a few things.

01:10:03.460 | Any thoughts from you guys quick on insurance

01:10:05.260 | or should I jump in?

01:10:06.380 | - No, let's do it.

01:10:07.220 | But I do wanna say I listened to it, dude.

01:10:09.140 | I mean, it is clear you put 50 hours of research into it.

01:10:12.420 | And as the keeper of all the episodes,

01:10:14.580 | you can find that episode of All The Hacks.

01:10:16.540 | That's number 104.

01:10:18.060 | So make sure to go listen to that

01:10:19.780 | after you listen to this.

01:10:21.140 | Make that be the first thing you listen to

01:10:22.940 | 'cause I promise you it will answer all of your questions

01:10:25.320 | as it pertains to homeowners insurance.

01:10:27.540 | - And more.

01:10:28.380 | Anytime someone sends me an email on how much they saved

01:10:30.220 | after listening to that episode, I write it down.

01:10:32.060 | And the stack rank is currently at $14,000.

01:10:34.660 | So if you listened to that episode

01:10:36.340 | and you save more than $14,000, absolutely reach out.

01:10:39.820 | I wanna put you at the top of the leaderboard.

01:10:41.660 | The goal is to save people as much as possible.

01:10:43.540 | That's part of the theme of the show.

01:10:44.620 | But one of the things that I think is really important

01:10:46.740 | is when we bought this home,

01:10:48.340 | the amount that we could insure the home for

01:10:50.740 | was not what I thought was an appropriate amount.

01:10:53.100 | So there are multiple people that have a requirement.

01:10:55.280 | The lender's gonna have some requirement

01:10:56.860 | that you insure the home enough.

01:10:58.180 | The insurance company will.

01:10:59.540 | But at the end of the day,

01:11:00.380 | that insurance is there to make sure

01:11:02.260 | that you can rebuild that home if something happens.

01:11:04.700 | And I asked around from some real estate agents I knew

01:11:08.100 | how much it would cost to buy a teardown and build a house.

01:11:10.500 | And I asked a builder and the numbers they gave me

01:11:13.140 | were about 20% more than the cost estimator

01:11:16.640 | that the insurance company gave me.

01:11:18.380 | And they were more than what our lender wanted us

01:11:20.540 | to have the home insured for.

01:11:22.080 | So for me, I didn't wanna deal with that risk.

01:11:24.540 | So I actually just increased the coverage on the home.

01:11:27.140 | So my home is insured for more than

01:11:29.180 | the minimum that they required.

01:11:31.020 | And one way to increase that total number

01:11:33.540 | that's cheaper than just insuring it for more

01:11:35.820 | is looking for extended reconstruction

01:11:37.860 | as an add-on to your policy.

01:11:40.020 | So that will cover you for anywhere from 25 to 100%

01:11:44.300 | of the cost of your home.

01:11:45.660 | So if you have a home that's worth 500 grand

01:11:48.340 | and you insure it for 500 grand,

01:11:49.620 | but you add 50% extended reconstruction,

01:11:52.620 | up to 750 to repair it.

01:11:54.540 | If building materials go up or something changes in the time,

01:11:58.060 | you'll get a little bit of an extra coverage there.

01:12:00.020 | So I think that's something really important

01:12:01.540 | to think about as you go through that.

01:12:03.020 | - Yeah, that's really cool.

01:12:03.840 | I never thought about that.

01:12:05.060 | Insurance, it's becoming increasingly difficult to get

01:12:08.580 | and significantly more expensive.

01:12:10.780 | I'm literally starting an insurance company right now

01:12:12.820 | because it has been so hard to find this.

01:12:15.440 | And I didn't realize until I just bought a lot of real estate

01:12:17.440 | how bad it's getting in certain states.

01:12:19.220 | There are certain areas where you're looking at homes

01:12:21.380 | that you will literally not be able to get insurance

01:12:24.100 | if you plan on making it a short-term rental.

01:12:26.460 | Florida is notorious for this.

01:12:28.100 | I had a quote on a property I bought in Florida

01:12:30.500 | that was $26,000 a year for an insurance policy.

01:12:34.700 | I mean, that is a mortgage payment on a normal home

01:12:37.780 | and some California problems as well.

01:12:39.480 | So in your due diligence process,

01:12:41.580 | we used to treat insurance like just an afterthought,

01:12:43.760 | like, oh yeah, yeah, my loan officer

01:12:45.100 | will connect me with someone.

01:12:46.020 | I'll look at policies, I'll pick one.

01:12:47.540 | No, you gotta make sure before you close on that house

01:12:50.020 | that you can get insurance and that it will be insured

01:12:52.620 | for as much as you will need if something goes wrong.

01:12:54.700 | Great point there, Chris.

01:12:56.100 | - Absolutely, Tahoe is another area like that

01:12:57.820 | where I know people who have very, very high costs.

01:12:59.700 | And even in the Bay Area, because of the fires,

01:13:02.100 | there are a bunch of insurance carriers

01:13:03.900 | that just won't insure.

01:13:05.200 | Travelers told me, "We can't insure your home."

01:13:06.980 | We're like, "We're not even in a real wildfire area,

01:13:09.220 | "but we're off their list."

01:13:10.740 | - Yeah, there's a BRRRR project that we're working on

01:13:12.540 | that we're gonna do a show on in the future.

01:13:13.880 | We did one previously.

01:13:15.180 | I could not get insurance for fire.

01:13:17.660 | I had to go through the state.

01:13:19.100 | The state had to create its own insurance program

01:13:21.380 | because providers were not providing it to people.

01:13:24.420 | And you can't get a loan in most cases

01:13:26.180 | if you don't have fire insurance on a property.

01:13:27.940 | So people don't talk about it very often,

01:13:29.820 | but it's a pretty significant problem that's going around.

01:13:31.760 | I'm glad you brought it up.

01:13:32.860 | - I'll give a couple quick ones,

01:13:33.940 | and then obviously check out this episode

01:13:35.360 | if you wanna go deep and save money on insurance.

01:13:37.620 | Bundling, not always the best deal.

01:13:39.780 | So a lot of people think,

01:13:40.620 | "Oh, I'm just gonna get my home insurance

01:13:41.860 | "with the same company that does my auto insurance."

01:13:43.900 | We found that many carriers, that was not the case.

01:13:47.480 | And we probably looked at 15, 20 carriers.

01:13:49.700 | So don't just assume that that's the right thing.

01:13:52.340 | Also, don't just assume that your carrier

01:13:54.180 | that you've had for five years,

01:13:55.380 | because they have their,

01:13:56.740 | you've been a customer forever discount,

01:13:58.660 | is actually cheaper.

01:13:59.880 | I found that to definitely not be the case in our situation.

01:14:03.060 | Also, don't forget that now you own a home,

01:14:05.220 | there's a chance that that home has,

01:14:06.720 | either now or in the future,

01:14:07.800 | increased your net worth enough

01:14:09.740 | that it might be worth looking at a umbrella policy

01:14:13.220 | that goes beyond the value of the home

01:14:15.260 | or your homeowner's insurance.

01:14:16.420 | And that will also extend to your auto insurance.

01:14:18.780 | There are a lot of people out there that buy a home,

01:14:20.660 | it appreciates over time,

01:14:21.860 | their net worth grows and grows and grows,

01:14:23.780 | and they're driving around

01:14:24.900 | and they haven't updated their auto policy,

01:14:26.660 | and they have $100,000 of liability insurance.

01:14:29.500 | So get in a car accident,

01:14:31.580 | something happens terrible,

01:14:32.740 | and someone sues you for more than that.

01:14:34.380 | Well, it turns out that you have more assets.

01:14:36.240 | And if you don't have an umbrella policy

01:14:37.860 | to sit on top of your auto policy or your home policy,

01:14:40.540 | you could find yourself in a not great situation.

01:14:42.680 | And there are some states where you're even able

01:14:44.820 | to sue someone for their future earnings.

01:14:46.740 | We're talking about real estate,

01:14:47.660 | we're talking about building wealth.

01:14:48.940 | As you cross that threshold to,

01:14:50.780 | now I'm starting to build my wealth,

01:14:52.560 | I think it's equally as important to protect that wealth.

01:14:54.780 | So that's something that it's very inexpensive.

01:14:57.860 | We're talking $100, depending on how much you need

01:15:01.300 | to protect yourself up to like a million dollars a year.

01:15:04.300 | I think it's something people should be considering.

01:15:06.100 | And then last, you buy this home,

01:15:08.360 | after you've moved in,

01:15:09.620 | go around the house with a camera or your phone

01:15:11.700 | and just take a video of everything in the room

01:15:13.480 | and just document all the stuff you own,

01:15:15.620 | because it's gonna save you a ridiculous amount of time

01:15:18.180 | if anything were to happen, burn down, burglary.

01:15:20.960 | You probably didn't save the receipts

01:15:22.740 | for everything you own.

01:15:23.820 | So take five minutes, make your own MTV crib style video

01:15:27.580 | running around, sharing everything in your house

01:15:29.780 | just in case, so you have that on hand.

01:15:31.260 | I think that's pretty important as well.

01:15:32.940 | - I've had to go through that process before

01:15:34.620 | and I did not do that.

01:15:36.380 | Gosh, it was horrible.

01:15:38.220 | It was horrible.

01:15:39.300 | And you gotta show receipts and you gotta show photos

01:15:42.140 | and you gotta look through thousands of photos

01:15:44.260 | on your camera roll for some random angle of your house.

01:15:48.280 | - Yeah, try to find that family picture you took

01:15:51.020 | with the flat screen in the background.

01:15:52.500 | Yeah, just walk through, make that video.

01:15:54.380 | I got a bunch of other tips,

01:15:55.380 | but we've been doing a lot in this episode.

01:15:57.600 | And I think anyone who's looking to buy a home

01:15:59.620 | is absolutely going to be able to get a better deal,

01:16:01.820 | find a better home, find the right home

01:16:04.060 | and get through that process easier.

01:16:05.920 | This has been so helpful.

01:16:07.260 | I'm so glad we got to do this episode.

01:16:08.940 | I feel like there's more things we could break down,

01:16:10.840 | but at this point, I feel like this is a good stopping point.

01:16:13.580 | Is there any last bits of wisdom that you guys wanna share

01:16:16.740 | to anyone thinking about going through this process?

01:16:19.420 | - Yeah, there's a thing that I mentioned

01:16:20.580 | to a lot of people who say,

01:16:21.400 | "I don't wanna be a real estate investor,"

01:16:22.860 | or, "Renting is cheaper than owning."

01:16:25.060 | It often is.

01:16:26.080 | In most cases, if you buy a home,

01:16:27.580 | the mortgage is gonna be more than the rent in year one.

01:16:30.700 | But go back to what rents were five years ago,

01:16:32.740 | 10 years ago.

01:16:33.920 | Are you telling me that the mortgages from 10 years ago

01:16:36.620 | are more expensive than rents today?

01:16:38.620 | It's hardly ever the case.

01:16:40.060 | So when you take the longer term approach,

01:16:42.060 | even if you're not a real estate investor,

01:16:43.500 | looking to rent out a property,

01:16:45.360 | buying a home and locking in a mortgage,

01:16:47.380 | especially with all the inflation we have,

01:16:49.140 | will always be cheaper for you in the long run.

01:16:51.980 | If you look at what your parents are paying on the house

01:16:53.980 | that they bought 25 years ago, those payments are laughable,

01:16:57.380 | but at the time they bought it,

01:16:58.340 | they thought it was expensive.

01:16:59.420 | So I often tell people,

01:17:00.460 | even if they don't wanna be a "real estate investor,"

01:17:03.980 | you should still buy a house

01:17:06.180 | and make sure that you've taken control

01:17:08.160 | of your financial future.

01:17:09.140 | You're not in the hands of landlords

01:17:10.660 | that can raise rent every year.

01:17:12.420 | My only caveat there would be,

01:17:14.020 | given the fees that you pay to an agent

01:17:16.260 | when you're selling the house

01:17:17.480 | and to the buyer's agent as well,

01:17:19.500 | if you're gonna buy a home

01:17:20.340 | and you're gonna be there for a year or two,

01:17:21.660 | you might not make money

01:17:22.740 | if you plan on selling it in a year or two,

01:17:24.540 | given the fees that are associated with that process.

01:17:27.540 | However, my advice,

01:17:29.300 | and this will lead us to an episode on both of our shows

01:17:31.700 | about house hacking, is there are ways,

01:17:34.180 | if you think, "Gosh, I can only really afford

01:17:36.520 | "a two-bedroom house, but we're about to start a family

01:17:38.960 | "and we're gonna need a bigger house in a few years.

01:17:40.740 | "What do I do?"

01:17:42.040 | There are ways to buy the four-bedroom house

01:17:43.900 | or the duplex that you might one day need

01:17:45.620 | for your whole family or something like that now.

01:17:48.180 | Use tactics that you guys have talked about,

01:17:50.660 | we've talked about in multiple episodes

01:17:52.100 | that we'll link in the show notes on house hacking,

01:17:53.800 | to be able to get that house

01:17:55.100 | that two, three, four, five years from now

01:17:56.900 | is the house you want and get it earlier.

01:17:59.860 | Increase some cashflow from it

01:18:01.340 | so you can afford it for those next three or four years

01:18:03.460 | while it's more space than you need.

01:18:05.380 | And I think that ends up allowing you

01:18:07.060 | to buy your 10, 15, 20, 30-year home

01:18:09.900 | before you're ready for all that space.

01:18:11.940 | And not be in a situation where you either can't buy the home

01:18:15.160 | or you've got to buy a home and sell it in a few years.

01:18:17.200 | So we've both done episodes on it.

01:18:19.040 | There's a number of tactics there.

01:18:20.820 | I think you can even use that income from your house hack

01:18:24.200 | to end up qualifying for income on your DTI

01:18:27.000 | for your mortgage.

01:18:28.000 | So I think there's some really great stuff there.

01:18:30.760 | Obviously, we've both done episodes on it,

01:18:32.360 | but there's a lot of stuff there.

01:18:33.240 | We did that in San Francisco

01:18:34.440 | and that helped us buy a three-bedroom place

01:18:36.200 | when we really only needed a one-bedroom.

01:18:38.280 | I will always thank house hacking for giving me my start.

01:18:41.120 | It is the catalyst for all wealth and real estate,

01:18:43.920 | my deep, deep belief.

01:18:45.100 | So yes, go listen to both those episodes.

01:18:47.640 | If you were closed off to the idea,

01:18:49.360 | I promise after you listen to them,

01:18:51.220 | you're gonna be all in.

01:18:52.600 | - Awesome, this has been fantastic.

01:18:54.120 | I guess thank you for being here.

01:18:55.440 | Thank you for having me here.

01:18:56.640 | Thanks for doing this kind of fun episode.

01:18:59.060 | And I hope we get to have a conversation

01:19:00.480 | like this again soon.

01:19:01.780 | - Chris, for people in our audience

01:19:03.120 | that wanna learn more about you, where can they find you?

01:19:05.460 | - I'm at all the hacks in whatever podcast app

01:19:08.160 | you're listening to on the internet.

01:19:09.720 | Unfortunately, not too common of a term.

01:19:11.760 | So if you like optimizing real estate,

01:19:13.460 | but you're interested in optimizing your life,

01:19:15.800 | your health, your money, your travel,

01:19:18.440 | I'm one of those crazy people with 10 million points

01:19:20.560 | and play the game hard, travel the world for free.

01:19:22.640 | If any of that is something you wanna do,

01:19:24.560 | come on over, have a listen, all the hacks.

01:19:26.880 | I'd love to have you there.

01:19:27.880 | I'd love to hear from you, reach out to me anywhere.

01:19:30.520 | Just love having new people in the community.

01:19:32.200 | What about you guys, for our listeners?

01:19:34.360 | - Rob, for anyone who's been charmed and bedazzled

01:19:36.760 | by your amazing personality, where can they find more?

01:19:39.200 | - You can find me over at Rob Built on YouTube,

01:19:41.920 | Rob Built on Instagram,

01:19:43.280 | and on the Apple Podcasts review platform

01:19:46.120 | where you'll be leaving us a five-star review

01:19:48.360 | if you like what we do and if you want our content

01:19:50.720 | to be served up to millions of other people

01:19:53.360 | who get the benefit of learning about financial freedom.

01:19:57.200 | What about you, David?

01:19:58.280 | - Find me at davidgreen24.com,

01:19:59.960 | see everything I got going on,

01:20:01.400 | or your favorite social media or YouTube platform,

01:20:04.360 | davidgreen24, E at the end of green.

01:20:06.560 | - And you guys forgot the most important thing,

01:20:08.040 | which is if you're listening to this on all the hacks,

01:20:10.040 | go check out the BiggerPockets Real Estate Podcast.

01:20:12.480 | - Well, that goes without saying.

01:20:13.720 | I mean, yeah, if you like this stuff.

01:20:15.840 | - Of course, I just, you know, gotta remind everybody.

01:20:18.600 | - Yeah, we've got almost 800 episodes of content

01:20:21.000 | just like this if you wanna learn

01:20:22.720 | how to make money through real estate.

01:20:24.640 | And Chris, I will say, I have a book coming out

01:20:26.320 | through BiggerPockets Publishing in October

01:20:28.600 | that's gonna be called "Pillars of Wealth,"

01:20:30.320 | and it's all about saving money, making money,

01:20:32.880 | and investing the difference.

01:20:33.880 | And so much of what you've talked about,

01:20:35.640 | I echo the sentiments in that book.

01:20:37.640 | It is incredibly important to be a wise steward

01:20:40.000 | of your resources if there's ways you can save money

01:20:42.240 | through credit card hacking, travel hacking,

01:20:44.120 | food hacking, everything.

01:20:46.040 | Like, take advantage of that.

01:20:47.200 | The people who manage their money well

01:20:49.240 | tend to be rewarded by the money gods who bring more.

01:20:52.000 | So I love what you're doing.

01:20:53.360 | Thank you for doing it.

01:20:54.200 | I'm glad our audience got to hear about it.

01:20:56.160 | - I'm glad I'm here.

01:20:57.000 | And I like what you're talking about

01:20:58.160 | because building wealth is not always

01:20:59.600 | about sacrificing everything.

01:21:01.280 | My goal is to help people live a life

01:21:03.120 | they really wanna live, just live it for less.

01:21:04.760 | And on that note, there's an episode,

01:21:06.240 | I think everyone listening on the BiggerPocket side

01:21:08.520 | should check out.

01:21:09.360 | I did this episode with Bill Perkins,

01:21:10.600 | who wrote a book called "Die With Zero."

01:21:12.360 | And it's radically reframed my perspective

01:21:15.400 | on basically all things wealth,

01:21:17.640 | spending money and everything.

01:21:18.680 | I really wanted to focus on what's important,

01:21:21.440 | maximizing my net fulfillment,

01:21:23.160 | not necessarily my net worth.

01:21:24.800 | And so if I leave people with,

01:21:26.320 | obviously, if you wanna optimize your insurance

01:21:27.800 | and save money, go there.

01:21:28.640 | If you wanna travel for free, where's episodes there.

01:21:31.360 | But if you wanna just kind of like

01:21:32.960 | really kick your entire perspective on money around

01:21:36.240 | and think about whether there's maybe a new way

01:21:38.000 | you might wanna be thinking about how you spend and save,

01:21:40.440 | episode 91 with Bill Perkins literally changed my life.

01:21:43.240 | It's the only episode I've done

01:21:44.360 | where I think I've listened to it five or six times.

01:21:46.440 | - Nice, okay.

01:21:47.400 | Yeah, I'm gonna go listen to that

01:21:49.080 | since I need something to listen to

01:21:50.520 | after episode 104, insurance, baby.

01:21:53.320 | - Yeah, that's awesome, exactly.

01:21:55.040 | - Wow, we covered so much in that episode.

01:21:58.480 | So I really hope it was helpful

01:21:59.960 | and that you keep it bookmarked

01:22:01.160 | for the next time you might need it

01:22:02.640 | or if anyone you know is going through

01:22:04.520 | the process of buying a home,

01:22:05.880 | there is no higher compliment

01:22:07.560 | or way you could support me in the show

01:22:09.440 | than by sharing it with them.

01:22:11.000 | And as I said before, if you have any other hacks,

01:22:13.720 | tips, or tactics for buying a home,

01:22:15.760 | please share them with me, podcast@allthehacks.com

01:22:19.520 | so I can share them with everyone else in a future episode.

01:22:22.480 | And if you wanna learn more about real estate,

01:22:24.400 | definitely don't forget to go check out

01:22:25.960 | the BiggerPockets Real Estate Podcast.

01:22:28.080 | All right, thank you so much for listening.

01:22:29.800 | See you next week.

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