Secret Contingencies, Tax Advantages, Agent Strategies & All You Need To Know About Buying A Home

00:00:00.000 | The only people that think a broker matters is the broker.

00:00:03.280 | Your clients never care who your broker is.

00:00:05.480 | It's 100% the agent.

00:00:06.840 | - So if you're trying to find someone and they're like,

00:00:08.240 | "Oh, you can work with my colleague on this."

00:00:10.040 | That's like red flag.

00:00:11.760 | - It used to be really useful.

00:00:13.720 | Just a little history lesson.

00:00:15.080 | Because there was a time where if you wanted to buy a house

00:00:18.200 | that Remax was listing,

00:00:20.400 | you had to go to a Remax agent at that office

00:00:23.320 | to buy that house.

00:00:24.560 | So Remax had their listings.

00:00:26.080 | Coldwell Banker had theirs.

00:00:27.240 | Century 21 had theirs.

00:00:28.840 | And you would jump from broker to broker

00:00:31.120 | and look at their inventory.

00:00:32.640 | When we created the multiple listing service,

00:00:34.560 | this was an agreement between all brokerages

00:00:36.160 | that they would all put their listings

00:00:37.480 | into one central location that everybody could see,

00:00:40.160 | which eventually morphed into the online listing portals

00:00:42.840 | that we all see when we're looking for homes.

00:00:44.680 | That eliminated the value of going to an individual broker

00:00:47.760 | 'cause now you can see everybody's inventory

00:00:49.560 | in the same place.

00:00:50.840 | - Hello, and welcome to another episode of All The Hacks,

00:00:53.600 | a show about upgrading your life, money, and travel.

00:00:56.280 | Today, we have an amazing episode

00:00:58.120 | about how to optimize the entire home buying experience.

00:01:01.040 | And I mean all of it, agents, listings, diligence,

00:01:03.680 | inspections, financing, offers, and everything in between.

00:01:07.320 | And while I've gone through this process twice,

00:01:09.280 | I wanted to make sure we had it all covered,

00:01:11.440 | including what you might wanna do differently

00:01:13.320 | in today's market.

00:01:14.560 | So I reached out to David Green and Rob Abasolo

00:01:17.000 | who hosts the number one real estate podcast out there,

00:01:19.560 | Bigger Pockets Real Estate.

00:01:21.240 | They're 10 times more knowledgeable

00:01:22.680 | than I am in this space,

00:01:24.200 | and I am excited to have them here.

00:01:26.240 | Between the three of us, we should leave no hack unturned,

00:01:29.280 | but please, if you find anything you think we missed,

00:01:31.560 | put it in the comments so I can share it in a future episode.

00:01:34.680 | And before diving in, if you could give us a thumbs up,

00:01:37.200 | it definitely help the YouTube algorithm.

00:01:38.960 | And if you're new here, please consider subscribing.

00:01:41.520 | Okay, let's jump in.

00:01:43.040 | (upbeat music)

00:01:45.620 | How the turntables have turned.

00:01:51.000 | Chris, welcome to our show,

00:01:52.960 | and I will just go ahead and welcome myself to your show

00:01:55.320 | to save you the time there.

00:01:56.560 | We've got a cool little crossover event going on here today.

00:02:00.040 | For those who are unfamiliar, my name is David Green.

00:02:02.120 | I'm a former police officer

00:02:04.840 | who became a real estate investor

00:02:06.120 | and is now a real estate broker.

00:02:07.600 | I have a mortgage company called The One Brokerage.

00:02:09.600 | I run a real estate team.

00:02:11.060 | I buy rentals, I write books,

00:02:12.400 | and I host the Bigger Pockets podcast.

00:02:15.080 | - And I'm Rob Abasolo.

00:02:16.920 | I am the co-host of the Bigger Pockets podcast.

00:02:19.160 | I have a goofy YouTube channel called Rob Built

00:02:21.240 | where I teach people how to invest in real estate,

00:02:24.160 | short-term rentals, tiny homes.

00:02:26.540 | And I'm a former ad man, if you will,

00:02:29.960 | just like the Mad Men, the TV show is basically me.

00:02:33.360 | I was a copywriter and I quit all that,

00:02:35.960 | quit all the corporate dreams about two years ago

00:02:38.760 | to focus full-time on real estate

00:02:40.760 | and documenting the journey.

00:02:42.520 | - I'm Chris Hutchins.

00:02:43.640 | Thanks for having me and thanks for joining me.

00:02:46.000 | I host the All The Hacks podcast.

00:02:47.720 | As people listening from that side know,

00:02:50.160 | I'm all about trying to optimize

00:02:51.560 | and upgrade every aspect of your life.

00:02:53.240 | I wanna do it while spending less and saving more

00:02:55.440 | and I wanna really dial things in.

00:02:56.880 | And so I'm glad we're here

00:02:58.240 | because I've gotten lots of questions

00:03:00.200 | about just the whole home buying process.

00:03:02.440 | And I was like, who could I find

00:03:04.120 | that knows more about this than I do?

00:03:05.940 | And so I thought, let's do this conversation.

00:03:08.600 | You guys are the pros.

00:03:09.960 | I've listened to your show, I don't know, countless times.

00:03:12.680 | And I thought this could be really fun

00:03:15.020 | for everyone on both sides to go through front to back,

00:03:18.180 | how do you buy a home and optimize every step of the way?

00:03:21.400 | And for all those listening on BiggerPockets

00:03:23.760 | but who haven't heard about Chris,

00:03:25.520 | his podcast, All The Hacks is an award-winning podcast

00:03:28.360 | that will teach you to upgrade your life, money and travel

00:03:31.320 | all while spending less and saving more, which we love

00:03:33.760 | because the more money that we save,

00:03:35.160 | the more real estate we can buy,

00:03:36.780 | which is what most of us are addicted to.

00:03:38.580 | So let's jump in.

00:03:39.680 | Someone wants to buy a house.

00:03:40.760 | I always tend to ask people,

00:03:42.440 | before you're even thinking about this,

00:03:44.200 | why are you doing this?

00:03:45.200 | So I'm curious if you guys have any frameworks you use

00:03:48.120 | for thinking about why you would buy a house,

00:03:50.240 | what's important to you.

00:03:51.800 | It doesn't even make sense

00:03:53.120 | before we jump into optimizing the entire process.

00:03:56.300 | - Well, I mean, there's a lot of reasons

00:03:58.440 | to get into real estate.

00:03:59.680 | I don't think that there's any one particular reason.

00:04:02.280 | Some people get into real estate accidentally

00:04:04.560 | where they buy a house and they live in that house.

00:04:07.160 | And then one day they decide to buy another house

00:04:10.540 | and move into that house.

00:04:11.520 | And then they have to decide should they sell

00:04:13.280 | or should they buy or should they sell or keep the home?

00:04:15.960 | And then they become a landlord and then decide,

00:04:17.800 | oh, hey, the cashflow from this is great.

00:04:19.360 | And then they buy more houses.

00:04:20.760 | Some people buy a house and then house hack

00:04:23.000 | and rent out rooms in their home

00:04:24.720 | to subsidize their mortgage.

00:04:26.440 | And then there are also the other side of it

00:04:28.160 | where people work nine to five jobs

00:04:30.460 | and maybe they're not making enough money

00:04:32.120 | at that nine to five job

00:04:33.120 | and they want to create supplemental income.

00:04:35.280 | So they get into real estate

00:04:36.340 | to help create monthly cashflow.

00:04:38.920 | Or maybe they just want to eventually replace

00:04:41.080 | their nine to five income with real estate.

00:04:43.080 | So for me, that was really why I got into it.

00:04:46.380 | I had a pretty stable career in advertising,

00:04:49.660 | never really felt like I was making enough money.

00:04:51.920 | And so my side hustle became real estate.

00:04:54.600 | And I just started buying more properties

00:04:56.800 | as a way to make more money,

00:04:58.180 | to supplement what I didn't feel like I was making

00:05:01.820 | at my career.

00:05:02.660 | What about you, David?

00:05:03.480 | What do you think?

00:05:04.320 | - There's a lot of practical reasons

00:05:05.460 | why you want to invest in real estate.

00:05:06.980 | Even the casual observer sees home prices

00:05:09.620 | getting higher and higher and higher.

00:05:11.400 | You watch the HGTV shows

00:05:13.380 | that show how people can make money in real estate.

00:05:15.460 | It's kind of understood that it works,

00:05:17.380 | but not everyone knows the brass tacks

00:05:19.500 | of why you can make money with real estate.

00:05:21.300 | A lot of it are tax advantages.

00:05:22.860 | The tax code has quite,

00:05:24.820 | it's very forgiving for real estate investors.

00:05:26.820 | And the money that you make from real estate,

00:05:28.540 | you usually pay much less taxes on

00:05:30.420 | than if you made that same money at a job,

00:05:32.860 | because there's a little bit of risk

00:05:33.900 | that's going to be involved in it.

00:05:35.300 | It's easy to leverage,

00:05:36.700 | meaning I can buy a $500,000 house

00:05:39.640 | and put maybe 5% down on the loan.

00:05:42.040 | So I've only put $25,000 of my money.

00:05:44.900 | But when that $500,000 house appreciates by 10%,

00:05:48.380 | goes up to 550,

00:05:50.060 | my $25,000 just made me $50,000 of equity.

00:05:53.980 | So it's like I've doubled my money relatively quickly,

00:05:57.200 | where it's harder to invest in other assets

00:05:59.540 | where you can borrow money quite as easily.

00:06:02.340 | And then there's lots of ways

00:06:03.300 | that real estate makes you money.

00:06:04.340 | You can buy it for less than market value.

00:06:06.220 | You can't really do that with a stock.

00:06:07.540 | You can't go get a deal on Tesla stock or Apple stock

00:06:10.700 | and find some way to get it cheaper.

00:06:12.500 | You can add value to the property.

00:06:14.340 | You can make it bigger.

00:06:15.240 | You can make it nicer.

00:06:16.220 | You can fix it out.

00:06:17.060 | You can change its use so that it can be rented to people.

00:06:20.220 | That creates actual equity,

00:06:22.020 | which you can't do with a stock.

00:06:23.260 | There's nothing I can do if I buy Tesla stock

00:06:25.100 | to make that company worth more.

00:06:27.740 | And then like Rob mentioned,

00:06:29.040 | it actually generates revenue.

00:06:30.420 | You can rent out spaces in that home.

00:06:32.660 | And when you do that correctly,

00:06:34.140 | you earn more money every month

00:06:35.620 | than what it costs to own the real estate.

00:06:37.220 | And that difference is what we refer to as cashflow,

00:06:39.420 | and that can replace active income.

00:06:41.280 | For anyone listening from all the hacks

00:06:43.180 | that hasn't really got into real estate investing,

00:06:45.100 | you guys have done a great job.

00:06:47.220 | I'm gonna throw out an episode

00:06:48.180 | that is about getting started with just $10,000.

00:06:50.980 | I think it was episode 730,

00:06:52.780 | 'cause I tried to take some notes ahead of time,

00:06:54.420 | but that was excellent.

00:06:56.120 | I will say the purpose,

00:06:58.460 | or maybe the goal of this conversation

00:07:00.140 | is to kind of walk through the home buying process,

00:07:02.340 | whether you're trying to invest,

00:07:03.760 | whether you're just trying to buy your primary residence,

00:07:05.700 | whether you're buying even a vacation home or something.

00:07:08.420 | So if you're listening and you're thinking,

00:07:09.900 | "I don't know if I'm ready for real estate investing."

00:07:13.000 | One, maybe you should be.

00:07:14.540 | And two, this is gonna be applicable to anyone,

00:07:17.360 | no matter what type of home you're buying,

00:07:18.700 | hopefully is what we can get to.

00:07:20.420 | So I know that's a little bit of the why.

00:07:22.300 | For me, I've never actually dabbled too hard

00:07:24.860 | in real estate investing outside of index fund REITs,

00:07:29.860 | but I've gone through the home buying process

00:07:31.620 | as a primary residence,

00:07:33.100 | and I actually own a fractional vacation home.

00:07:35.740 | So I own 1/8 of a home through a program called Picasso,

00:07:39.020 | where we bought 1/8 of a home up in Napa.

00:07:41.660 | And it's interesting 'cause you can invest.

00:07:44.360 | It's a lot better, in my opinion,

00:07:46.020 | than a timeshare or anything like that.

00:07:48.000 | So that's been great.

00:07:48.840 | So that's my experience.

00:07:50.120 | And I've optimized little pieces of it along the way,

00:07:52.920 | but nothing like what you guys have.

00:07:54.500 | So I'm excited.

00:07:55.800 | - Curious, Chris, how well have you done?

00:07:57.960 | I think you said you bought a primary residence

00:07:59.740 | that you live in, right?

00:08:00.800 | - Yep, I've done that twice now.

00:08:02.360 | - And how has that investment,

00:08:04.520 | if you just looked at it from a pure investment perspective,

00:08:06.720 | outperformed some of the other things you've invested in?

00:08:09.440 | - Yeah, I mean, I would say the first time around, yes,

00:08:12.180 | but I had the fortunate luck of buying in the Bay Area

00:08:16.100 | at the worst possible,

00:08:19.060 | bottom of the worst real estate crash.

00:08:20.980 | So I got quite lucky by timing.

00:08:24.180 | I didn't know it was gonna do as well as it did.

00:08:26.380 | The most recent one, I don't think it's been long enough

00:08:29.060 | to see anything major differences yet.

00:08:32.540 | But the first one, if you layer in taxes and leverage,

00:08:35.660 | yeah, it was a great investment.

00:08:37.300 | - It's hard with an N of one in a small market

00:08:39.720 | that blew up like crazy to feel like I know too much

00:08:43.680 | based on one success story.

00:08:44.680 | - That's how it works, though, honestly.

00:08:47.000 | It really does work like that sometimes for people

00:08:50.400 | where for me, I think every real estate...

00:08:54.320 | I was gonna say real estate.

00:08:55.520 | Every real estate investor,

00:08:57.760 | they all have this big lofty dream of becoming a millionaire.

00:09:01.240 | And it's super achievable because you can buy

00:09:03.920 | five properties that appreciate

00:09:05.880 | over the course of five, 10 years,

00:09:07.880 | and you could just have a million dollars in equity.

00:09:09.760 | And it wasn't necessarily because you were a genius

00:09:12.240 | or because you had the most,

00:09:16.360 | I don't know, I already said it,

00:09:17.200 | genius strategy, right?

00:09:18.200 | But it happens because you just did it

00:09:20.880 | and you kept doing it and you keep doing it consistently.

00:09:23.640 | That's really the secret sauce.

00:09:24.800 | So yeah, maybe it was by luck

00:09:27.800 | that you bought that house and the property in that market.

00:09:31.000 | But what a lot of people end up doing is

00:09:32.680 | when that happens, they get a taste for it

00:09:34.440 | and they keep just buying and buying and buying and buying.

00:09:36.840 | And I think if you do that consistently,

00:09:38.800 | no matter what, you'll always look like a genius

00:09:40.840 | 30 years from now.

00:09:42.160 | - Yeah, we could have a much longer debate

00:09:44.200 | maybe in a future date about debating that strategy,

00:09:48.360 | putting it in a stock, all these other investments.

00:09:50.640 | But I think whether you wanna build a portfolio of 20 homes,

00:09:54.120 | whether you wanna buy multi-family homes,

00:09:55.580 | commercial properties,

00:09:56.420 | or you just wanna buy a primary residence,

00:09:57.720 | at the end of the day, you gotta find a home,

00:09:59.960 | you gotta buy the home,

00:10:00.800 | you gotta decide if it's a good deal,

00:10:02.160 | you gotta close on it,

00:10:03.080 | you gotta fund the purchase

00:10:05.360 | unless you wanna buy it with cash,

00:10:06.480 | which I'm guessing most people don't.

00:10:08.280 | So maybe let's jump into that process

00:10:10.680 | and kick off with just someone who's like,

00:10:12.600 | "I'm not really sure what I'm doing."

00:10:14.800 | You've been an agent.

00:10:15.800 | Let's talk a little bit about that process

00:10:17.800 | of partnering with someone

00:10:19.080 | to help you go through this process

00:10:20.800 | instead of just trying to wing it on your own.

00:10:23.780 | And when that makes sense or maybe when it doesn't.

00:10:26.340 | - Yeah, and if you're gonna buy a property,

00:10:28.040 | you don't know much about it,

00:10:28.880 | you definitely wanna use a real estate agent

00:10:30.640 | in the beginning.

00:10:31.640 | And when you're buying, here's something

00:10:33.040 | people don't realize,

00:10:34.280 | you don't have to pay your agent.

00:10:36.440 | If you're buying a house off of the MLS,

00:10:38.520 | this would be any property you see off Zillow or Redfin,

00:10:40.760 | something like that,

00:10:41.920 | the seller has already predetermined

00:10:44.080 | a certain amount of money.

00:10:45.360 | They are going to pay the buyer's agent

00:10:47.480 | for bringing you to the property.

00:10:49.240 | So you have a lot of questions,

00:10:50.920 | there's paperwork you're not going to understand,

00:10:52.680 | you don't know what the process is, it's intimidating.

00:10:55.120 | You find a real estate agent,

00:10:56.080 | and I'll add, they're not all the same.

00:10:57.440 | There's good agents and bad agents,

00:10:58.840 | there's good lawyers and bad lawyers,

00:11:00.440 | good doctors and bad ones.

00:11:01.480 | You really wanna find somebody who's good at what they do.

00:11:03.960 | They can take a lot of the fear that you have

00:11:06.240 | right out of it.

00:11:07.080 | I mean, it's amazing when you take this scary process

00:11:09.800 | and there's a person that, like me,

00:11:11.040 | that does this so often, it's boring to me.

00:11:13.200 | Like, "Oh, another one of these,

00:11:14.440 | "I've walked this path so many times."

00:11:16.400 | It's definitely not scary.

00:11:18.000 | So that's something that every person

00:11:19.480 | who wants to buy a home should know right off the bat.

00:11:21.480 | Find a buyer's agent,

00:11:22.680 | they're gonna answer a lot of the questions

00:11:24.160 | that you're gonna have,

00:11:25.000 | and they're going to protect you

00:11:25.840 | in ways you didn't even know

00:11:27.360 | that you needed to be protected.

00:11:28.800 | And maybe we can go through

00:11:29.720 | what the actual escrow process looks like,

00:11:31.800 | or the process from start to finish

00:11:33.680 | of what to expect when buying a home if you'd like.

00:11:35.920 | If you're a little bit more experienced,

00:11:37.720 | you bought homes before,

00:11:39.320 | one thing that people will look at,

00:11:40.600 | especially in a competitive market like ours, Chris,

00:11:42.520 | we just realized that we're neighbors,

00:11:43.920 | we live pretty close to each other,

00:11:45.000 | probably like an hour and some change away,

00:11:47.560 | is you can go directly to the listing agent

00:11:50.080 | and you can say, "Hey, I will let you represent me

00:11:52.200 | "on this deal, but I'm gonna need

00:11:54.400 | "some kind of an advantage.

00:11:55.360 | "I need you to get my offer accepted over the other people,

00:11:58.160 | "or I'd like a little bit of a discount on the price

00:12:00.280 | "if you're getting to represent me here."

00:12:02.320 | So there are people who buy a lot of real estate

00:12:04.280 | that has said, "Hey, I don't think I need

00:12:05.640 | "my own buyer's agent necessarily.

00:12:07.440 | "I still need someone to handle the paperwork."

00:12:09.280 | But they go right to the listing agent,

00:12:11.080 | they look for an advantage.

00:12:12.000 | And that is pretty popular in the Bay Area

00:12:14.440 | where most listings are getting several offers

00:12:16.680 | on all of them.

00:12:18.000 | - Yeah, actually, I have bought two homes in the Bay Area

00:12:20.360 | and both times I've used the seller's agent.

00:12:22.920 | So we can talk about that a little bit more

00:12:24.360 | 'cause I have some thoughts about it,

00:12:25.620 | but maybe rewind a little.

00:12:26.720 | You said it's important not all agents are the same,

00:12:28.920 | you gotta pick the right one.

00:12:31.320 | Obviously, not everyone lives in the Bay Area,

00:12:33.320 | so you're not gonna be the perfect agent for everyone.

00:12:35.040 | How does someone find that perfect agent?

00:12:37.080 | - First thing to look for,

00:12:38.160 | find a person that sells a lot of houses.

00:12:40.160 | Lot of agents don't.

00:12:41.160 | In fact, most agents don't.

00:12:42.360 | I'd say 90% of agents sell a couple houses a year or less.

00:12:46.880 | And it's unpopular to say this,

00:12:48.160 | the agents get angry 'cause they're offended right now.

00:12:50.480 | Like, "Just because I only sell two houses a year

00:12:52.280 | "doesn't mean I'm not good."

00:12:53.320 | Okay, I know.

00:12:54.520 | However, tell me anything that you do twice a year

00:12:57.200 | that you get really, really good at.

00:12:59.240 | Like, in general, that's how life works.

00:13:01.080 | If you snowboard twice a year for your whole life,

00:13:03.320 | you never really get that good at snowboarding.

00:13:04.960 | Or it takes you 20 years before you're as good as somebody

00:13:07.480 | that just snowboarded every weekend

00:13:09.280 | for the whole first year that they got into it.

00:13:10.800 | Repetition really does develop mastery.

00:13:13.320 | I talk about that in the Burr book that I wrote.

00:13:15.700 | So the first thing I look for is an agent

00:13:17.200 | that sells a lot of homes, period.

00:13:18.860 | The next thing I want is an agent

00:13:20.200 | that owns real estate themselves.

00:13:22.200 | At minimum, they gotta own their own house,

00:13:24.040 | but ideally, I want them to own investment property.

00:13:26.720 | It gives a completely different perspective

00:13:29.080 | when you've bought a home and you believe in it

00:13:31.560 | and you just get a different set of goggles

00:13:34.120 | to look at real estate through.

00:13:35.480 | I don't have any kids.

00:13:36.520 | I love kids.

00:13:37.360 | We were talking about that before the show.

00:13:38.840 | But each of you, as a dad, I am sure,

00:13:42.080 | sees something different when you look at a kid than I do.

00:13:44.680 | Like, I don't immediately freak out

00:13:46.300 | when they start putting something in their nose.

00:13:48.320 | I haven't had enough experience

00:13:49.520 | of seeing how that could go wrong.

00:13:51.200 | Rob has seen some of that.

00:13:53.040 | So he's gonna have a much different emotional response

00:13:56.040 | to that marble or that Play-Doh

00:13:57.920 | getting a little bit close to the nostrils.

00:14:00.000 | Real estate agents that own real estate have that sixth sense.

00:14:02.880 | They can recognize that's a bad neighborhood,

00:14:04.740 | that's not the right tenant,

00:14:06.100 | that's not the right floor plan,

00:14:07.440 | that's not the right structure.

00:14:08.480 | You really wanna go to this house

00:14:10.460 | that may not look as pretty in the pictures,

00:14:12.600 | but will be a better deal.

00:14:14.600 | The third thing that you wanna look for

00:14:16.680 | is an agent that understands

00:14:18.280 | the financial component of real estate.

00:14:20.160 | Many real estate agents are geared to cater

00:14:23.320 | to their clients' emotions.

00:14:24.640 | They wanna be liked.

00:14:25.640 | They're very high as an eye on the disc profile.

00:14:28.700 | This is how they make their money, by being likable.

00:14:30.560 | Most people reach out to the agent

00:14:32.080 | who's the nicest, the friendliest, the warmest.

00:14:34.020 | That doesn't mean they're the smartest.

00:14:35.720 | So when you're having conversations,

00:14:37.020 | I always wanna hear agents that are approaching real estate

00:14:39.320 | from a financial perspective.

00:14:40.740 | I wanna hear them telling me,

00:14:42.200 | this is the part of town that's being redeveloped.

00:14:44.200 | This is the next up-and-coming area.

00:14:46.360 | This is where all the money is going into.

00:14:48.640 | This is a property that would function as a rental

00:14:50.840 | if you moved out.

00:14:52.120 | Even if that's not necessarily what you're looking for,

00:14:55.000 | you just wanna buy a home.

00:14:56.360 | If your agent sees things that way,

00:14:58.320 | it is very good to hedge your bets in the future

00:15:00.240 | 'cause you never know when you have more kids,

00:15:01.800 | need more bedrooms, get a new job,

00:15:03.320 | wanna move for some reason.

00:15:04.800 | You don't wanna be locked into a situation

00:15:06.480 | where it's hard to sell that home

00:15:07.680 | or it can't be used as a rental property

00:15:09.280 | if you wanna leave it.

00:15:10.280 | - David, let me ask you something.

00:15:11.600 | Does the requirement of having an agent

00:15:15.360 | that owns real estate, is that as important

00:15:17.960 | if you're just buying a primary residence?

00:15:20.920 | Do you weight that a lot heavier

00:15:22.320 | for people that are looking to buy investment properties?

00:15:25.200 | - No, it's the same for a primary residence.

00:15:27.000 | Let me tell you why.

00:15:27.840 | The first house I ever bought,

00:15:29.560 | my agent did not own any real estate.

00:15:32.000 | And I bought this house in the very end of 2009,

00:15:34.480 | great time to buy real estate, like you were saying, Chris.

00:15:37.080 | My agent did not tell me that the property taxes

00:15:40.320 | in that area had special assessments assigned to them

00:15:42.960 | and were much higher than the normal property taxes.

00:15:46.280 | In fact, they ended up being about $250 a month higher.

00:15:49.620 | So I was expecting 300, they were 550.

00:15:52.340 | Now I was buying this as a rental property,

00:15:54.920 | but even if I had bought buying it to live in,

00:15:57.680 | and I gotta remember at the time,

00:15:58.800 | the total mortgage was like $1,300.

00:16:00.840 | So bumping it from 1300 to 1550

00:16:03.040 | was a pretty significant chunk.

00:16:04.520 | It's like a 20% increase almost in my overall payment

00:16:07.900 | because they overlooked that property taxes were higher.

00:16:10.640 | Now, agents who own real estate themselves

00:16:13.320 | would be familiar with the fact

00:16:15.160 | that property tax bills come.

00:16:16.760 | There's more expenses than just your principal

00:16:18.680 | and interest on your mortgage.

00:16:20.180 | They would see angles like insurance can increase

00:16:22.440 | in this area because it's in a flood zone.

00:16:25.080 | I really think she missed it

00:16:26.580 | because she had never paid a mortgage on her own.

00:16:29.080 | She never had her taxes and her insurance

00:16:32.280 | escrowed into her mortgage payment.

00:16:34.400 | The next time I bought a house,

00:16:35.820 | it was with an agent that had been selling houses

00:16:37.760 | for a very long time and sold a lot

00:16:39.480 | and owned a lot of real estate herself.

00:16:41.240 | And as we went through the process,

00:16:42.880 | she educated me.

00:16:44.480 | You don't wanna buy on that part of town

00:16:46.200 | because you're gonna pay extra money

00:16:47.540 | to get the better school districts.

00:16:48.840 | You don't wanna buy over there 'cause the taxes are higher.

00:16:51.180 | You don't wanna buy a house like that

00:16:52.440 | because with that kind of a roof,

00:16:53.600 | your insurance is gonna be a lot higher.

00:16:55.480 | I learned so much about investing in real estate

00:16:58.200 | just from the person that was getting paid to help me.

00:17:00.520 | It was like free advice and free knowledge.

00:17:03.260 | And it really gave me a different perspective

00:17:04.900 | of what to look for and what to avoid.

00:17:07.000 | - I love it.

00:17:07.840 | Okay, so I just sent a link to you

00:17:09.400 | and there's this guy in Northern California.

00:17:12.400 | Maybe you know him, Stanley Lowe.

00:17:14.200 | Number one agent in Northern California for 10 years.

00:17:17.240 | Looks like and is commonly described in San Mateo County

00:17:21.000 | as like the Asian Elvis of real estate agents.

00:17:24.300 | And so when you first said,

00:17:26.520 | look for someone who sells a lot of houses,

00:17:28.160 | I was looking at, I know this guy.

00:17:29.760 | I get the flyers in the mail.

00:17:31.560 | Like he sells all the houses.

00:17:33.500 | High volume, high throughput, not just low income property,

00:17:37.880 | all kinds of price ranges.

00:17:40.320 | Does that mean that if I were looking for a real estate agent

00:17:42.080 | like would he be the right guy?

00:17:44.880 | Should I consider him even though it might not feel

00:17:47.840 | like someone's personality.

00:17:51.320 | Maybe that's not the personality I would want

00:17:53.600 | as my real estate agent.

00:17:54.720 | But like, do the numbers speak more than a personality?

00:17:58.360 | How do you think about that?

00:17:59.200 | And if anyone's curious, greenbanker.com

00:18:01.720 | is this real estate agent's website.

00:18:03.880 | - I mean-- - Green without the E.

00:18:05.400 | - He's got it down.

00:18:06.260 | I will say that.

00:18:07.100 | I mean, the marketing, the cowhide blazer

00:18:10.400 | and the big circular glasses.

00:18:12.280 | I mean, I'm in personally.

00:18:14.360 | - That's funny.

00:18:15.200 | That's 'cause I'd be running the other way

00:18:16.600 | the minute I saw this.

00:18:17.680 | - I'm in.

00:18:19.040 | - So he does sell a lot of homes, I'm sure.

00:18:20.920 | And so he probably does have some experience.

00:18:22.900 | My gut would tell me as someone who has worked

00:18:25.560 | with a lot of clients and knows a lot of realtors,

00:18:28.240 | this is probably not someone who's actually

00:18:29.920 | going to be representing you.

00:18:31.480 | He's going to have staff that are going to be handling

00:18:33.540 | a lot of it.

00:18:34.380 | You're not going to be talking to Stanley.

00:18:35.880 | And he's going to likely make up for a lack

00:18:39.120 | of negotiation ability and focus on saving you money

00:18:43.160 | or making you money if it's a listing with his personality.

00:18:46.120 | So he's a great marketer.

00:18:47.520 | And the top producing agents are always the best marketers.

00:18:50.580 | This is a problem in our industry.

00:18:52.320 | The best agents don't make the most money.

00:18:54.440 | The ones that are best at getting the phone to ring

00:18:57.040 | make the most money.

00:18:57.880 | But that doesn't mean that they're the best

00:18:58.960 | when it comes to representing you.

00:19:00.640 | - So you want someone that sold a lot of houses,

00:19:02.120 | but maybe you don't necessarily want the person

00:19:04.640 | who markets themselves as the person

00:19:06.320 | who sold the most houses.

00:19:08.160 | And so it's not kind of that sweet spot

00:19:10.360 | of maybe like the 60th to 90th percentile,

00:19:13.620 | but not the very top.

00:19:15.440 | - There's a lot of things people fall for.

00:19:17.080 | I sell the most houses in this neighborhood.

00:19:19.280 | Realtors will use that as a way of saying,

00:19:20.960 | "I'm the best. Don't fall for that."

00:19:23.080 | It makes sense to our perspective

00:19:24.840 | when we're listing the home,

00:19:25.680 | "Oh, you sell all the houses in the neighborhood.

00:19:27.120 | You know how to get me top dollar."

00:19:28.880 | You just don't realize until you think about it,

00:19:30.880 | the buyers don't care.

00:19:32.360 | The buyers don't care who's selling that house.

00:19:34.240 | They are never going to look at who the listing agent is

00:19:36.640 | when they're writing their offer.

00:19:37.480 | They just care about the house.

00:19:39.000 | The buyer's agent needs to know the neighborhood.

00:19:40.920 | The buyer's agent needs to know the amenities.

00:19:43.600 | When you're looking to buy somewhere,

00:19:45.360 | you want an agent that knows the area very well.

00:19:47.240 | When you're looking to sell,

00:19:48.600 | it will never matter how many homes in the area

00:19:51.480 | that agent sold.

00:19:52.320 | In fact, the only reason they sell a lot of homes

00:19:54.160 | in the same area is they put their sign in all the yards

00:19:56.560 | and then they go, we call it farming,

00:19:57.760 | knocking on all the doors and meeting all the people,

00:20:00.140 | getting their name out there.

00:20:01.400 | They're just able to utilize a listing

00:20:03.360 | to build leverage to get more,

00:20:04.720 | but there's no competitive advantage

00:20:06.360 | when it comes to representing a seller

00:20:08.080 | if you've sold other homes in the area.

00:20:10.120 | - I wanted to add one thing to that.

00:20:11.880 | Well, hey, it sounds like if they're putting signs

00:20:13.720 | in everyone's yard, it sounds like they're good marketers,

00:20:15.960 | which goes back to what you were saying.

00:20:18.040 | But I did want to say that one really important piece

00:20:20.800 | to agents just from a consumer side

00:20:23.400 | and as someone that relies on agents pretty heavily

00:20:26.320 | is them having a really thorough Rolodex

00:20:30.400 | of vendors that I can use to help me run my properties,

00:20:33.320 | whether I'm living in it or not.

00:20:34.680 | Like if I'm buying a short-term rental, for example,

00:20:37.120 | I know I need a contractor, cleaner, landscaper,

00:20:40.440 | pool maintenance person, pest control,

00:20:43.320 | and probably a plumber, electrician,

00:20:45.320 | and all that type of stuff.

00:20:46.140 | So when I'm calling a realtor,

00:20:48.320 | and this goes into how many houses have they sold,

00:20:50.600 | if they've sold a lot of houses over the last five, 10 years

00:20:53.760 | they probably have a pretty thorough Rolodex.

00:20:55.920 | I mean, outdated term.

00:20:57.160 | If they use the term Rolodex, maybe they're not with it.

00:20:59.920 | But if they have a very big contact list

00:21:02.560 | of all these different vendors,

00:21:04.100 | that's what I'm personally looking for in a realtor

00:21:06.200 | because a lot of the times,

00:21:08.240 | I really need a firsthand referral

00:21:10.680 | to know that I can successfully either live in a property

00:21:14.120 | or execute a rental.

00:21:16.320 | - Yeah, that Rolodex is interesting.

00:21:17.600 | It's something I never saw in the contract,

00:21:19.460 | but once you close, I was surprised

00:21:22.000 | that even though it's not necessarily required,

00:21:24.000 | a good agent will spend so much time

00:21:25.580 | helping make sure the process from,

00:21:27.800 | I closed to, I moved in, I got the yard done,

00:21:30.560 | I renovate, even renovated something.

00:21:32.560 | They've been super helpful there.

00:21:34.260 | We have a lot to go here,

00:21:37.020 | but I do wanna touch quickly on that negotiating piece

00:21:40.240 | that you mentioned earlier, David.

00:21:41.800 | When someone's trying to get into this,

00:21:43.240 | what leverage or room is there for negotiating?

00:21:45.960 | I did what you suggested.

00:21:47.520 | I went to the seller's agent and said,

00:21:49.240 | "Hey, I don't wanna mess around.

00:21:51.080 | "I know I want this house.

00:21:52.140 | "I don't need to go find another agent.

00:21:53.580 | "I feel good in negotiating.

00:21:55.020 | "Will you work with me?"

00:21:56.740 | It ended up being a great situation

00:21:58.940 | because that agent got more commission

00:22:00.700 | and was a little bit more biased

00:22:02.220 | towards trying to get my purchase over the finish line.

00:22:05.580 | And in one case, rebated 1% of their fee back to me.

00:22:10.580 | Are there other rooms for negotiation?

00:22:12.640 | Are there other tactics someone can use

00:22:14.300 | to get a better price or likelihood of getting accepted?

00:22:17.460 | - Well, the first thing you have to do is define a win.

00:22:19.900 | So in a situation where the house is getting 10 offers,

00:22:22.500 | a win is just getting it at all.

00:22:24.300 | There are times in the Bay Area or other hot markets

00:22:26.740 | with restricted supply and lack of inventory

00:22:29.900 | that you're just not gonna get a home, period.

00:22:32.100 | It's incredibly hard to get in contract

00:22:33.940 | if you're competing with so many people.

00:22:35.740 | So in those situations,

00:22:36.820 | you're not gonna get a discount from your listing agent.

00:22:39.140 | You're not gonna get a better price on the home.

00:22:41.260 | You just have to get it.

00:22:42.820 | Now, in other situations,

00:22:44.300 | which is what I try to target my clients into,

00:22:46.700 | I show them properties that less people are competing with.

00:22:49.860 | The listing photos are ugly.

00:22:51.420 | It's been in contract.

00:22:52.380 | It fell out of contract.

00:22:53.580 | Now the days on market have ticked up

00:22:55.240 | and people aren't looking at it anymore.

00:22:57.420 | I look for opportunities to help them

00:22:59.260 | get into a property with much less interest

00:23:01.460 | and then we can get them a discount on the price.

00:23:03.940 | We can save them some money there.

00:23:05.220 | A mistake a lot of people make

00:23:06.580 | is they go to the listing agent

00:23:07.980 | of an incredibly hot property.

00:23:09.980 | They ask for a discount from the listing agent

00:23:12.420 | and they go, "No, there's like 12 other people

00:23:14.580 | "that wanna buy this house.

00:23:15.660 | "I can get my client 100 grand more

00:23:17.220 | "going with a different offer.

00:23:18.340 | "I'm not gonna discount commission just to help you get it."

00:23:20.700 | So that's a big piece is knowing

00:23:22.620 | when you have leverage and when you don't.

00:23:24.960 | - And I wanna talk about making that offer now, right?

00:23:27.100 | Like let's say someone's gone through this process.

00:23:28.780 | They've picked their agent.

00:23:29.900 | They've figured out what they're doing

00:23:31.220 | and they find a house and they're trying to decide,

00:23:33.980 | is this a good house?

00:23:34.820 | So let's start with that before we get to the offer.

00:23:36.540 | It's like you have a place in mind.

00:23:38.140 | You're looking at this listing.

00:23:39.980 | Maybe you do, maybe you don't have an agent yet,

00:23:41.540 | but what are the things that are really important

00:23:43.040 | for someone to be paying attention to

00:23:44.860 | when they're looking at a listing

00:23:46.100 | either online or in person?

00:23:48.340 | Rob, what do you look for?

00:23:49.660 | - I like to find stuff that needs a little bit of work,

00:23:53.860 | a little TLC personally on my end,

00:23:56.840 | just because I don't really like paying the premium

00:23:59.640 | of someone else's fine-tuned work

00:24:02.320 | that I probably don't like anyway.

00:24:04.960 | So I don't wanna go in and usually do a full rehab.

00:24:07.680 | That's not really my space,

00:24:08.920 | but I'm looking for something that I can really spice up

00:24:10.960 | with a nice paint job,

00:24:12.700 | maybe doing a lighter cosmetic renovation,

00:24:16.200 | like changing out the floors or something like that.

00:24:18.320 | So I'm not necessarily looking for top tier.

00:24:20.280 | I'm just looking for something that I can come in

00:24:21.880 | and add my touch to.

00:24:23.760 | I don't really like paying

00:24:24.900 | for turnkey properties personally,

00:24:26.500 | but it all comes down to what your buy box is.

00:24:29.960 | What about you, David?

00:24:31.680 | - In a hot market like where we are today,

00:24:34.360 | it's usually a good time to buy real estate

00:24:35.880 | because when there are more buyers

00:24:37.980 | than there are product to buy,

00:24:39.960 | the odds of prices increasing are favorable

00:24:42.600 | because you've got a favorable supply demand ratio there.

00:24:46.080 | However, it becomes harder to get into the asset

00:24:48.640 | in those environments,

00:24:49.840 | which is why most people get discouraged.

00:24:52.200 | There's also an element where people aren't educated.

00:24:54.240 | So they all chase after the same homes.

00:24:56.260 | They want the ones with the best listing photos,

00:24:58.560 | the best locations.

00:24:59.840 | They're moving ready.

00:25:00.680 | That gives you that emotional tingle that you just love.

00:25:03.640 | Those are the houses everyone looks for.

00:25:05.480 | You're just looking for something

00:25:06.720 | that other people are gonna pass up

00:25:08.300 | that you see the value in,

00:25:09.920 | that you're gonna put a little bit of elbow grease into.

00:25:11.840 | Sometimes bad smells can really benefit you

00:25:14.200 | when you're trying to buy a home

00:25:15.040 | 'cause it's gonna turn off a lot of your competition.

00:25:17.320 | Ugly floor plans.

00:25:18.260 | People don't realize it's usually not as expensive

00:25:20.120 | as you think to move walls around.

00:25:21.880 | But when it's got a closed off kitchen,

00:25:23.260 | you can't see what's going on in the family room.

00:25:25.320 | The wife's thinking, "I can't see what the kids are doing.

00:25:27.340 | I just don't like it."

00:25:28.200 | That's as far as they go.

00:25:29.120 | They don't realize that you can spend $2,000 and move a wall.

00:25:32.400 | You can see everything that's going on there.

00:25:34.240 | Then painting and flooring.

00:25:35.640 | You can really...

00:25:36.760 | You can fix homes up for a lot less

00:25:38.960 | than what people think today.

00:25:40.280 | But you have to see the opportunity,

00:25:42.000 | not the move and ready product.

00:25:43.680 | - How does how long the house has been

00:25:45.280 | on the market play into this?

00:25:46.360 | When you see something that's been on for a while,

00:25:48.360 | or we'll get to something that just came on after.

00:25:52.440 | - Hey, I mean, it's just like online dating, right?

00:25:54.360 | I don't do online dating,

00:25:55.240 | but I know how the thing works.

00:25:57.080 | If she's been single for six days,

00:25:59.420 | she's probably not in a rush to take your response

00:26:01.960 | and go out with you Friday.

00:26:03.200 | But if she's been single for six months,

00:26:04.880 | she's probably gonna give you a little bit more attention

00:26:06.560 | when you send that message.

00:26:07.880 | When a seller first puts their house on the market,

00:26:10.400 | they have all the leverage.

00:26:12.040 | They have tons of interest.

00:26:13.320 | People are going to look at their home.

00:26:14.800 | Showings are being scheduled.

00:26:16.400 | Agents are calling all excited.

00:26:17.720 | "We really love the house.

00:26:18.800 | Do you have any other offers?"

00:26:19.860 | It's this frenetic, crazy, emotional pace

00:26:22.760 | where the sellers are trying to think of,

00:26:24.040 | "How can I leverage this to get as much money as possible?"

00:26:26.720 | Which is really where I'm trying to guide my clients away.

00:26:28.760 | I don't want you in that feeding frenzy.

00:26:30.760 | If no one buys that house after 14 to 21 days,

00:26:34.000 | interest is starting to slow.

00:26:35.600 | By day 30, day 40, they're getting worried, okay?

00:26:39.440 | It's not, "Who's the best guy that I can take

00:26:41.800 | that gets to take me to prom?"

00:26:43.160 | It's, "Am I going to prom at all?

00:26:45.120 | I just want a date.

00:26:46.080 | Does anyone want to buy my house?

00:26:47.440 | I'm stuck. I might not be able to move."

00:26:49.640 | And I write about this in some of the books

00:26:51.080 | that I've published for BiggerPockets for agents.

00:26:52.920 | There's this spectrum of fear and greed.

00:26:55.280 | We usually all start off on the greed side.

00:26:57.800 | And as you slide across, you end up in the fear side.

00:27:00.880 | You're worried, "I might not sell the house at all."

00:27:03.140 | So in most markets,

00:27:04.480 | depending on what your average day is on market,

00:27:06.500 | like this wouldn't apply in an area

00:27:08.480 | with $7 million homes that tend to sit on the market

00:27:10.920 | for six months before they sell.

00:27:12.560 | But for your regular starter homes,

00:27:14.520 | they should be selling in less than 30 days

00:27:16.240 | in most markets in the country.

00:27:17.280 | So the minute you get past that point,

00:27:19.520 | you're going to start seeing some worry in sellers

00:27:21.800 | and they will be open to more aggressive offers

00:27:24.320 | or terms that are more favorable to the buyer.

00:27:26.960 | - What happens if you are in a hot market?

00:27:28.520 | And let's say, you've identified a neighborhood,

00:27:31.800 | you've looked, maybe a house comes on

00:27:33.600 | every two or three months,

00:27:34.660 | and you know, "This is what I want."

00:27:37.240 | You say, the moment that house comes on the market,

00:27:39.720 | it's hot, it's the worst time.

00:27:41.960 | Is there a way to get ahead of that?

00:27:43.120 | Is there a way to find homes

00:27:44.440 | before they get on the market and buy them?

00:27:46.240 | Is that finding the right agent?

00:27:47.900 | Or how do you get what might be a hot home

00:27:51.280 | before it's hot?

00:27:52.660 | Rob, what have you been doing?

00:27:53.560 | You've gotten a couple of deals this way.

00:27:55.440 | - Yeah, so there are definitely a few.

00:27:58.040 | I mean, there's, let's see,

00:27:59.280 | there's the creative finance and the sub two deal, right?

00:28:01.840 | And that's effectively where you're cold calling

00:28:04.200 | a bunch of property owners and also wholesaling,

00:28:06.680 | where you cold call property owners

00:28:08.580 | and basically try to buy the property directly from them

00:28:12.200 | versus going the realtor route.

00:28:14.240 | That's a very popular niche within real estate.

00:28:16.500 | But honestly, I think having a really big network

00:28:19.460 | of realtors that you're friendly with is super important.

00:28:22.520 | And more than just having like a bunch of realtors

00:28:25.080 | in your network, finding a realtor that I see,

00:28:28.200 | and this is sort of where the marketing thing

00:28:29.820 | kind of comes into play too.

00:28:31.520 | But finding a realtor that's very good at marketing

00:28:34.800 | and having a vast network of realtor friends

00:28:37.600 | that can pass each other deals to you

00:28:39.800 | or pass deals to each other,

00:28:41.560 | that to me is super important.

00:28:43.280 | Because if you find someone that's like very new

00:28:45.180 | and very green in the industry,

00:28:47.360 | they probably don't have a lot

00:28:48.540 | of other real estate colleagues necessarily.

00:28:51.140 | But if it's someone that's been working

00:28:52.220 | in the industry for a while,

00:28:53.860 | they have the opportunity to find all these deals

00:28:55.940 | before they ever hit the market.

00:28:57.000 | So I have realtors that are texting me all the time

00:28:58.940 | that they're like, "Hey, my bud just sent me this.

00:29:01.020 | "It's gonna hit the market next week."

00:29:02.940 | They're interested in selling it

00:29:04.220 | before even going to market.

00:29:05.540 | Are you interested?

00:29:06.700 | And I'll look at a deal much quicker, much faster,

00:29:09.260 | and much more intentionally knowing

00:29:10.500 | that I've got first dibs on it.

00:29:12.260 | - Do you think that applies for kind of consumer?

00:29:15.260 | Should I, if I'm looking to buy a home in a neighborhood,

00:29:17.680 | should I just talk to all the agents in the neighborhood

00:29:20.080 | and say, "Hey, I'm looking to buy a home.

00:29:21.300 | "There's nothing on the market I want right now,

00:29:23.360 | "but I just want you to know

00:29:24.620 | "if you can find me something, I'm ready to go."

00:29:26.800 | And just talk to 10 agents.

00:29:28.760 | Do agents like that kind of behavior or?

00:29:31.040 | - Not really, yeah.

00:29:33.060 | - No, not really.

00:29:34.120 | 'Cause you kind of send the message

00:29:35.820 | that you're looking for an open relationship

00:29:37.840 | and they're wanting a committed relationship.

00:29:40.360 | So it doesn't benefit me as an agent if you come

00:29:43.040 | and you're talking to 12 agents in the years.

00:29:44.960 | If you find me the deal, I'll buy it from you.

00:29:47.480 | That sounds great, but I don't need to sell it to you.

00:29:49.760 | If I get a listing, it's so hot right now,

00:29:52.280 | everyone's gonna wanna buy it, right?

00:29:54.140 | I don't have to discount my commission.

00:29:55.840 | There's people that would probably give me extra commission

00:29:57.920 | if they wanted to get that home,

00:29:59.200 | or I wanna be able to go to my seller

00:30:00.880 | and tell them I got 10 offers on their home

00:30:02.640 | and I wanna look like a rockstar to them.

00:30:04.240 | So I don't think the go wide instead of deep strategy works

00:30:09.040 | unless it's a buyer's market.

00:30:10.720 | When you are in those situations where it's very difficult

00:30:13.860 | to find someone to buy a home, we're talking 2010

00:30:16.040 | when there was for sale signs everywhere.

00:30:18.160 | Listings were all over the place.

00:30:19.500 | REO inventory was massive,

00:30:21.600 | but there weren't a lot of pre-approved buyers

00:30:23.120 | that were willing to step in and buy a house.

00:30:24.960 | Then that strategy makes a lot more sense.

00:30:26.920 | That's where you're reaching out to all these agents saying,

00:30:28.960 | "Hey, if you get a deal, bring it to me and I'll buy it

00:30:31.640 | "because you're the prize in that situation."

00:30:33.840 | They need a buyer.

00:30:35.240 | And you're basically saying,

00:30:36.080 | "Listen, I'm one of the few buyers that's out there

00:30:38.040 | "that could do this thing.

00:30:38.880 | "But if you want my business,

00:30:40.560 | "you're gonna have to make it worth my while."

00:30:42.400 | That works a lot better than in a market like today

00:30:44.780 | where you're just one out of a whole bunch of other people

00:30:47.820 | that are all struggling to try to get a house.

00:30:49.700 | - Yeah.

00:30:50.540 | I'm actually really glad you asked that, Chris.

00:30:51.720 | And I'm glad you clarified, David,

00:30:52.940 | because Chris, for reference,

00:30:54.780 | I'm in about 16 different markets around the country.

00:30:57.300 | So I actually have a massive network of realtors

00:31:00.780 | in different cities.

00:31:01.900 | They're all very aware of exactly what I'm looking for.

00:31:04.400 | So when they get a pocket listing or an off-market listing,

00:31:07.100 | they text me directly.

00:31:08.500 | When I'm working in a city specifically

00:31:10.820 | or in a market specifically,

00:31:11.860 | I do want just one realtor.

00:31:13.340 | And that's why I say,

00:31:14.540 | "I wanna find a realtor

00:31:15.500 | "that's got a lot of realtor friends

00:31:17.040 | "that can help find some of those off-market deals."

00:31:19.660 | - So it's about finding someone that's connected.

00:31:21.140 | Is that as simple as just seeing whose name pops up

00:31:23.380 | in a neighborhood most for sale signs?

00:31:25.900 | Like who represented most of the sales

00:31:27.620 | or any other tactics for finding that super connected agent?

00:31:31.520 | - I see why it would look that way.

00:31:34.120 | But there are so many real estate agents, Chris.

00:31:37.260 | It's like the ones you see are the tip of the iceberg.

00:31:40.200 | There's so many of them.

00:31:41.420 | There's way too many agents.

00:31:42.700 | We don't need this many.

00:31:44.060 | It reminds me of a scene in "The Office"

00:31:45.300 | where Dwight and Michael are walking through a crowded room

00:31:48.000 | and Dwight says, "There's too many people.

00:31:49.220 | "We need another plague."

00:31:50.500 | There's just so many agents

00:31:52.160 | that have flooded into the real estate space.

00:31:53.820 | Like people coming to California in 1849

00:31:56.060 | thinking they're gonna strike gold.

00:31:57.900 | They're all fighting to try to get that seller

00:32:00.980 | to think of them.

00:32:01.860 | It's just this massive marketing campaign

00:32:04.220 | that every agent is throwing themselves in front of people.

00:32:07.660 | And now you've got investors

00:32:09.140 | that are also sending letters to those same people saying,

00:32:11.700 | "I wanna buy your house.

00:32:12.540 | "I wanna buy your house."

00:32:13.900 | Most home sellers know in general,

00:32:17.340 | they have what everyone wants.

00:32:19.700 | Their home is valuable.

00:32:21.700 | You're probably not gonna put things in your favor

00:32:23.980 | by just talking to every real estate agent out there

00:32:26.180 | and saying, "Hey, I wanna buy a house if you get one."

00:32:28.300 | Because if they can get a listing, it's guaranteed to sell.

00:32:30.300 | There's no reason they're gonna go to you particularly.

00:32:34.460 | - And then this is a very short question,

00:32:36.140 | but it's important.

00:32:37.460 | How much does the brand behind the agent matter?

00:32:39.980 | Is it all about the agent

00:32:41.140 | or is it all about the agency they work at

00:32:44.340 | or the brokerage firm they work at?

00:32:45.900 | - The only people that think a broker matters is the broker.

00:32:48.860 | Your clients never care who your broker is.

00:32:51.060 | It's 100% the agent.

00:32:52.420 | - So if you're trying to find someone

00:32:53.460 | and they're like, "Oh, you can work with my colleague."

00:32:55.620 | That's like red flag.

00:32:57.820 | - It used to be really useful, just a little history lesson.

00:33:00.660 | Because there was a time where if you wanted to buy a house

00:33:03.820 | that RE/MAX was listing,

00:33:05.980 | you had to go to a RE/MAX agent at that office

00:33:08.900 | to buy that house.

00:33:10.140 | So RE/MAX had their listings,

00:33:11.660 | Coldwell Banker had theirs, Century 21 had theirs,

00:33:14.500 | and you would jump from broker to broker

00:33:16.660 | and look at their inventory.

00:33:18.180 | When we created the multiple listing service,

00:33:20.100 | this was an agreement between all brokerages

00:33:21.700 | that they would all put their listings

00:33:23.060 | into one central location that everybody could see,

00:33:25.700 | which eventually morphed into the online listing portals

00:33:28.380 | that we all see when we're looking for homes.

00:33:30.220 | That eliminated the value of going to an individual broker

00:33:33.300 | 'cause now you can see everybody's inventory

00:33:35.100 | in the same place.

00:33:36.420 | - And if people that you know had success

00:33:38.140 | using those kind of like online brokers

00:33:40.500 | that are like, "We're just gonna cut your rate

00:33:41.940 | "and give you a huge discounts."

00:33:44.260 | You know, I know Redfin does that.

00:33:46.100 | Has anyone, have you heard success stories there?

00:33:48.220 | Is the savings worth it?

00:33:49.340 | - In our industry, Chris,

00:33:50.980 | I'm just gonna tell you the brutal truth.

00:33:54.180 | I look for a Redfin agent

00:33:56.540 | to be on the other side of the transaction

00:33:58.060 | because I know I'm gonna destroy them in negotiation.

00:34:03.580 | Because they don't make hardly any money on these deals.

00:34:05.780 | They usually go there when they're desperate for food.

00:34:08.380 | I'm starving, please Redfin, give me some deals

00:34:11.380 | or whatever the discount brokerage is.

00:34:13.540 | I've had massive success,

00:34:15.420 | particularly targeting listings that are Redfin listings

00:34:18.140 | because those Redfin agents are, not all the time,

00:34:21.500 | I'm sure there's gonna be a Redfin agent out there

00:34:23.260 | who's gonna say, "Well, I'm a Redfin agent and I'm good."

00:34:24.940 | Yes, they do exist, but in general,

00:34:27.060 | any of those discount brokerages--

00:34:27.900 | - I sell the most Redfin homes in this neighborhood.

00:34:33.460 | - Yeah, in fact, that might even be an advantage

00:34:35.580 | to tell people to look for those

00:34:37.220 | because your agent is going to have a field day

00:34:40.100 | with their agent if you have a good one.

00:34:42.420 | - Yeah, and last tip.

00:34:43.460 | I got one more tip here.

00:34:44.660 | If the listing says, "Run, don't walk,"

00:34:48.500 | it's probably not that great of a listing.

00:34:51.380 | - Oh, wow.

00:34:52.220 | - We were just talking about this yesterday.

00:34:53.940 | Every listing agent is putting that their house

00:34:55.940 | boasts of 5 bedrooms, boasts of amazing light,

00:34:59.260 | boasts of a great view.

00:35:00.740 | These houses are just boasting all over the place.

00:35:02.700 | - Bay Area real estate has become very arrogant.

00:35:05.020 | (both laughing)

00:35:06.380 | - That's funny.

00:35:07.500 | - Oh, okay, so let's say we find this house.

00:35:09.620 | Whether it's a hot home,

00:35:12.340 | whether it's the home you're not sure about

00:35:14.540 | and you wanna rehab a little bit,

00:35:15.820 | what do you do when you've got someone

00:35:17.860 | and you're like, "I want this home,"

00:35:19.540 | or at least, "I wanna consider it,"

00:35:21.140 | and you're going through that diligence process

00:35:22.820 | of trying to figure out, doing inspections,

00:35:25.780 | how do you optimize that part of the process

00:35:28.380 | to make sure you're getting the right home

00:35:30.100 | at the right price?

00:35:30.940 | - The first thing for uninitiated to understand,

00:35:33.180 | writing an offer is not a commitment to buy a house.

00:35:35.940 | A lot of people get stuck dragging their feet.

00:35:37.940 | They don't wanna write an offer.

00:35:38.820 | They need time to think about it.

00:35:40.020 | They need time to pray about it.

00:35:41.420 | They need time to talk to their mom.

00:35:42.660 | They need time to analyze it.

00:35:43.980 | By the time they get comfortable writing an offer,

00:35:45.540 | someone's already bought the house.

00:35:46.620 | This happens a lot of the time.

00:35:48.460 | When you write an offer,

00:35:49.740 | most of the time you will include a contingency,

00:35:52.580 | which is an allowance to back out of the deal

00:35:54.620 | and recover your earnest money deposit

00:35:56.540 | if you find something you don't like.

00:35:58.420 | The main three contingencies are inspection contingencies,

00:36:01.100 | appraisals, and loans.

00:36:02.540 | So if you can't get your loan,

00:36:03.660 | the house doesn't appraise at value,

00:36:05.100 | or something is revealed when you're inspecting the home,

00:36:07.540 | which can, in most cases, literally be,

00:36:09.380 | I looked at the front lawn

00:36:10.460 | and I didn't like the way the grass looked

00:36:12.020 | when I inspected it, I want out.

00:36:14.020 | You can use that contingency for just about anything.

00:36:16.860 | It's okay to rush to put a house in contract

00:36:18.900 | and then slow down when you're in contract

00:36:21.620 | and order your pest inspection,

00:36:23.100 | order your home inspection, order your pool inspection,

00:36:25.200 | order your roof inspection,

00:36:26.260 | whatever it is that you're looking to do.

00:36:28.220 | Take your time from that point,

00:36:29.700 | and if you decide you don't like the house,

00:36:31.160 | you want to back out, you can without penalty.

00:36:33.700 | - And what about hot markets where there's no contingencies

00:36:36.820 | or people are saying,

00:36:37.660 | "We're not accepting offers with contingencies."

00:36:39.820 | Are there secret contingencies you can kind of put in?

00:36:42.020 | Are there ways to get out?

00:36:43.020 | Or what do you think about those?

00:36:43.860 | - Oh, man, you're going for the good stuff here.

00:36:44.900 | There's a couple, right?

00:36:45.780 | Here's a couple of hacks that I'll share with you

00:36:47.580 | that normally you got to be my client

00:36:49.280 | if you want me to know this.

00:36:50.660 | There's a rule in California

00:36:52.860 | that once you receive the disclosures on a property,

00:36:55.580 | you have seven days to back out after receiving them.

00:36:58.660 | It gives you time as a buyer to review these disclosures.

00:37:01.660 | That is not a part of the contract that realtors use.

00:37:04.460 | That is a state law that cannot be waived in a contract.

00:37:08.500 | Many times listing agents,

00:37:10.380 | because like I said, they're not all good.

00:37:12.180 | You get that discount agent,

00:37:13.360 | you get the person that hardly sells homes.

00:37:15.340 | They're arrogant, like, "Oh, I'm going to sell this thing

00:37:17.140 | because everybody wants my listing,"

00:37:18.420 | but they don't know those little rules.

00:37:20.300 | So we've had times with our clients

00:37:22.020 | where the listing agent did not provide

00:37:23.860 | the disclosures up front.

00:37:25.460 | They just didn't have their clients fill them out.

00:37:26.960 | The clients didn't want to fill them out.

00:37:28.120 | They didn't know why they were important.

00:37:29.860 | If I see there's no disclosures,

00:37:31.180 | then they make me waive contingencies.

00:37:32.940 | I will put the house in contract,

00:37:34.860 | wait for them to give me those disclosures,

00:37:37.020 | and then the timeline starts.

00:37:38.220 | I have a certain amount of time after they've been...

00:37:40.140 | I'm trying to remember if it's three days or seven days.

00:37:41.820 | I believe it's seven days, but I have three in my head.

00:37:44.300 | That might be something else.

00:37:45.520 | Anyway, we then have a period of time to decide

00:37:49.340 | if we want to move forward on that house.

00:37:51.220 | And we backed out and they said,

00:37:52.660 | "Well, you don't have an inspection contingency."

00:37:54.200 | We said, "Yeah, here's the disclosure law.

00:37:56.020 | "There's nothing you can do about that."

00:37:57.420 | That's one loophole that we've looked for.

00:38:00.140 | - That is...

00:38:01.740 | That's good.

00:38:03.620 | You dirty dog.

00:38:05.140 | Everybody, go back 30 seconds and listen to that again.

00:38:07.740 | That is so good.

00:38:08.580 | I can see why you didn't want to necessarily

00:38:09.860 | say that on the podcast.

00:38:11.100 | You don't want people to know.

00:38:12.900 | - That's exactly right.

00:38:13.980 | And so when I'm selling homes as a listing agent,

00:38:16.780 | we have our people fill these disclosures out.

00:38:18.700 | And if you write an offer to buy the house,

00:38:20.540 | the first thing I do is say,

00:38:21.940 | "Review these before we even accept your offer."

00:38:24.800 | I want it to be signed that you've looked at them

00:38:26.880 | to start that timeline as fast as possible.

00:38:30.040 | I also...

00:38:30.880 | It's why I want people to come to me to be their agent.

00:38:32.460 | Because like I said,

00:38:33.300 | when you use an agent that doesn't sell a lot of homes,

00:38:35.760 | they don't know that.

00:38:36.640 | And even more importantly, I know that they don't know.

00:38:40.280 | And when I sense that as the agent,

00:38:41.960 | that's where I start shifting everything

00:38:43.620 | to protect my client.

00:38:44.560 | Another one that people don't think about.

00:38:46.640 | Usually when you buy a house,

00:38:48.000 | you have a period of time to send in

00:38:49.560 | your earnest money deposit.

00:38:51.640 | So there are certain times where there's two houses

00:38:53.960 | and you like them both

00:38:54.800 | and you don't know if you're gonna get one.

00:38:55.880 | So you write offers on both houses

00:38:57.400 | and then you get lucky and end up with two of them.

00:38:59.680 | Like, "What am I gonna do now?"

00:39:01.600 | Well, if you don't send the earnest money deposit in

00:39:04.160 | and you cancel the contract,

00:39:05.300 | there's really no recourse that the seller has

00:39:07.520 | to come back after you and say,

00:39:09.240 | "No, you have to give me money for this."

00:39:12.080 | There is no money in the escrow to take out.

00:39:14.840 | So when you're a buyer,

00:39:15.960 | either put more money or put a longer period of time

00:39:19.720 | before you have to put in your earnest money

00:39:21.160 | and use that time to do your inspections,

00:39:23.000 | do your praying, talk to your mom,

00:39:24.360 | go through your due diligence.

00:39:26.480 | Or in some cases, I will admit,

00:39:28.600 | I bought houses out of state

00:39:30.520 | and the listing agent and the escrow company

00:39:32.960 | literally did not ever check to see

00:39:35.480 | if I sent the earnest money in.

00:39:37.240 | I've closed on several houses in Tennessee

00:39:39.320 | that I never sent the earnest money for the entire escrow.

00:39:42.640 | And nobody even asked about it.

00:39:45.080 | I just sent the whole money in to close.

00:39:47.200 | And I was fascinated that that happened,

00:39:49.200 | but it probably happens in more markets

00:39:51.080 | than people think or with agents

00:39:52.960 | that aren't experienced selling houses

00:39:54.320 | like this hypothetical Redfin agent we talked about

00:39:56.520 | that doesn't even know they're supposed to check.

00:39:58.560 | You might make it 10, 12, 14 days

00:40:00.400 | before an escrow officer realizes,

00:40:02.560 | "Oh, we don't have earnest money."

00:40:04.160 | And they contact your client about looking into it,

00:40:05.920 | which is plenty of time to get some of those inspections

00:40:07.960 | done without a contingency.

00:40:09.400 | - I love that.

00:40:10.240 | And it's funny because I took that strategy

00:40:12.120 | we mentioned earlier where I used the seller's agent.

00:40:14.400 | And in fact, we made an offer

00:40:16.440 | and they set disclosures like two hours

00:40:19.120 | before we made the offer.

00:40:20.280 | It's like quick cursory glance.

00:40:22.600 | And fortunately, everything worked out,

00:40:24.480 | but I did not get reminded by the seller's agent

00:40:27.680 | that I might have some time to back out.

00:40:29.560 | And I think that's one of the risks

00:40:31.720 | when you use the seller's agent

00:40:33.960 | is that they might give you a little bit of the edge

00:40:37.960 | to try to get the deal done

00:40:39.120 | 'cause they might make a little bit more.

00:40:40.600 | Not at the risk of kind of completely tanking

00:40:43.280 | the purchase price for their seller,

00:40:45.720 | but they're certainly not gonna try to come up

00:40:48.040 | with creative ways to save the deal and get you out.

00:40:51.880 | Any other things when you're going through inspections,

00:40:53.840 | things that people often miss, things that you learn?

00:40:57.240 | I feel like every time, and it's only happened two times,

00:40:59.640 | but every time I bought a home, like 30 days later,

00:41:02.000 | I'm like, "God, how did I miss that?"

00:41:04.560 | Any tips for finding all the that's?

00:41:06.560 | - Yeah, sure.

00:41:08.440 | So I think one thing to keep in mind,

00:41:10.400 | and David kind of hit the nail on the head with this one

00:41:12.720 | is when you get into escrow,

00:41:15.880 | if it's your goal to get into a property,

00:41:18.080 | get into escrow as fast as possible.

00:41:19.800 | I typically run two sets of analytics,

00:41:21.880 | especially with rental portfolios.

00:41:23.840 | I have my back of the napkin analytics, right?

00:41:26.200 | Where I just wanna know, does this property feasibly work?

00:41:30.160 | If it kind of does, okay, great.

00:41:31.360 | I go into escrow,

00:41:32.560 | and then I run my deep dive analytics for that, right?

00:41:35.840 | The reason I say this is because a lot of people,

00:41:38.720 | like David said, will spend so much time

00:41:40.520 | just getting analysis paralysis,

00:41:43.040 | and then they'll lose out on the deal.

00:41:44.640 | One of those things that typically give me

00:41:46.200 | a lot of analysis paralysis back when I started

00:41:49.120 | was this little phrase in the listing that says,

00:41:51.200 | as is, seller not willing to make any repairs

00:41:54.080 | to the property.

00:41:55.200 | And so that held me back from ever buying properties

00:41:57.440 | or ever making offers until I figured out

00:41:59.640 | that that really doesn't mean anything.

00:42:02.360 | Really, you can buy a property as is,

00:42:04.880 | but David, correct me if I'm wrong,

00:42:06.280 | there's no actual legal paperwork that is signed

00:42:10.000 | that says that you can't actually ask for concessions

00:42:12.080 | because what's happened for me 100% of the time

00:42:15.000 | is I'll make the offer on an "as is" house,

00:42:18.760 | and then I get the inspection report.

00:42:20.400 | And guess what?

00:42:21.240 | I asked the seller for $10,000 worth of repairs

00:42:24.000 | or a $2,000 credit or whatever, right?

00:42:26.760 | So just because something says as is

00:42:29.720 | doesn't necessarily mean that you have to take

00:42:31.640 | that at face value.

00:42:32.560 | And that's something that I think a lot of people miss

00:42:34.440 | when they're buying their first or second or third property.

00:42:37.400 | - 100% correct.

00:42:38.960 | I laugh in the face of as is.

00:42:41.120 | It means nothing, nothing!

00:42:43.360 | As is is a completely toothless claim.

00:42:46.600 | When someone says, "I'm selling my property as is,"

00:42:48.680 | what they're saying is,

00:42:49.520 | "I don't want to make any further concessions."

00:42:52.800 | But no seller wants to make concessions.

00:42:54.920 | It just doesn't matter anything.

00:42:57.480 | The only time someone could say, "I'm selling a house as is,"

00:43:00.680 | is if you have no contingencies

00:43:03.280 | and your earnest money deposit is so high

00:43:05.800 | that you would not want to back out of that deal.

00:43:08.600 | Because you could always back out of a deal,

00:43:10.240 | you'll just forfeit the earnest money

00:43:11.760 | and the seller will get to keep it.

00:43:13.280 | So let's say, Chris, you asked earlier,

00:43:15.000 | what if you just can't get contingencies

00:43:17.360 | and all the things we've mentioned,

00:43:19.400 | you don't have any wiggle room?

00:43:20.920 | What if you just make your earnest money deposit really low?

00:43:23.640 | Like, all right, no contingency, short escrow,

00:43:25.400 | I'll give you everything you want,

00:43:26.240 | $3,000 earnest money deposit.

00:43:28.480 | You find something you don't like in the house,

00:43:29.880 | worst case scenario, you lose three grand.

00:43:31.600 | No one loves it, but it's better than closing on a house

00:43:34.600 | that has a bunch of problems.

00:43:35.760 | So don't ever believe as is.

00:43:38.240 | Rob and I bought a house together, actually.

00:43:39.760 | He kind of got to see behind the scenes

00:43:41.560 | of I was kind of working the negotiation

00:43:43.880 | through our realtor.

00:43:44.840 | So it was like me telling Rob to tell our realtor,

00:43:46.960 | hey, say this.

00:43:48.040 | And he saw some of the just the angles and the experience

00:43:51.800 | that when you've been through these escrows you develop,

00:43:54.960 | sellers always start off with a hard stance.

00:43:57.000 | I'm not taking less than three and a half million.

00:43:59.520 | And then three weeks, four weeks later,

00:44:00.940 | all of a sudden, three million

00:44:01.960 | is starting to look like a possibility.

00:44:03.560 | I'm not giving them anything.

00:44:04.840 | Well, we get these inspection reports

00:44:06.440 | and hey, your pool has got some issues,

00:44:07.880 | your landscaping has some issues,

00:44:09.240 | your roof has some issues.

00:44:10.600 | It's going to be $75,000 worth of work

00:44:12.800 | that needs to be done.

00:44:14.080 | You give them a week or two of sweating that out,

00:44:16.000 | they start to think a little bit differently.

00:44:17.960 | And so oftentimes when you're the buyer,

00:44:19.880 | you want to gather as much as you can

00:44:21.880 | about what's wrong with this property,

00:44:23.320 | present it to the sellers, and then wait.

00:44:26.040 | Let them marinate in their worry

00:44:27.920 | that you're going to back out of the deal

00:44:29.200 | or you're going to find something else,

00:44:30.800 | and they're going to have to give you concessions.

00:44:32.480 | The knee-jerk response is almost always no,

00:44:35.180 | I will not do it.

00:44:36.480 | But if you wait long enough,

00:44:37.640 | those nos frequently turn into yeses.

00:44:39.920 | So when I'm listing a house,

00:44:42.440 | I will have my client pay for a home inspection,

00:44:45.880 | which they never like doing because they're 500 bucks,

00:44:47.920 | but it saves you so much money, Chris.

00:44:49.760 | You would ask for other hacks that when you're in escrow.

00:44:52.760 | Anytime there's a inspection that's done,

00:44:55.600 | the perspective is as crazy as this is,

00:44:57.880 | is the buyer's buying a house in perfect condition.

00:44:59.920 | And if anything's wrong with it,

00:45:01.160 | they deserve a credit or they deserve repairs.

00:45:03.160 | They deserve something to put this house back

00:45:05.440 | into perfect condition.

00:45:07.160 | Frequently, the house is in much better shape

00:45:09.080 | than other houses in the neighborhood,

00:45:10.240 | but they still use that inspection to get a discount.

00:45:13.640 | Short answer is if you are buying a house

00:45:16.200 | and it's not a situation where they have another buyer

00:45:18.600 | willing to pay more than you in backup position

00:45:20.440 | who's going to jump right in there, anything absent that,

00:45:22.760 | you can ask for credits.

00:45:24.160 | You can get a significant chunk

00:45:25.840 | of your closing costs paid for by the seller.

00:45:28.000 | If you wait long enough into the escrow before you ask,

00:45:31.020 | almost regardless of the condition of the home.

00:45:32.800 | So when I'm selling houses,

00:45:34.680 | that's how I get people to waive the inspection contingency.

00:45:37.240 | You're going to get a home inspection paid for.

00:45:39.140 | We're going to give that to the buyer up front.

00:45:40.840 | We're going to say, here's what it looks like.

00:45:42.160 | Here's all the reports.

00:45:43.040 | If you don't like it, find another house.

00:45:44.660 | But if you want this house, this is what you're buying.

00:45:46.400 | And you're going to waive those contingency.

00:45:47.800 | So when you're selling, that's what you want to do.

00:45:49.620 | When you're buying, you want to avoid it.

00:45:51.120 | And then one practical thing to look for

00:45:53.240 | that everybody misses

00:45:54.600 | is what we call the sewer lateral connection.

00:45:56.860 | So there is a sewer line that runs from your home

00:45:59.640 | out to usually the sidewalk

00:46:01.040 | where it connects to the city sewer line.

00:46:03.480 | Those plumbing lines, if it's an older home,

00:46:08.280 | usually we're like running through the front yard,

00:46:10.540 | can become infiltrated by tree roots.

00:46:12.800 | This is a crazy thing.

00:46:13.940 | But when the roots are just pushing

00:46:15.620 | against that PVC pipe for years,

00:46:17.860 | they will eventually push through there

00:46:20.040 | and then the roots will grow

00:46:21.480 | and these sewer lines can become clogged

00:46:23.520 | and they're very expensive to fix.

00:46:25.280 | So one thing I tell every home buyer who's trying,

00:46:27.880 | like, what could I miss?

00:46:28.720 | What's the that thing that I might've missed?

00:46:30.840 | Get that sewer line scoped by a plumber

00:46:33.200 | before you buy the house,

00:46:34.320 | during your due diligence,

00:46:35.400 | and make sure that there aren't any clogs

00:46:37.440 | 'cause those skins can be 10, 15 grand a fix

00:46:39.520 | when they get messed up.

00:46:41.020 | - Yeah, that did happen to me.

00:46:44.880 | We did a sewer scope.

00:46:46.520 | There was a problem with the sewer.

00:46:48.680 | They sent out the plumber to quote-unquote fix the sewer.

00:46:52.200 | And we asked for the sewer scope

00:46:54.040 | like an hour before closing.

00:46:55.520 | And they're like, "Oh, we didn't do one."

00:46:57.140 | But everyone's hands were sort of tied.

00:46:58.760 | It was December 31st.

00:47:00.200 | We were all trying to close it that year.

00:47:01.960 | It was gonna mess everybody up.

00:47:03.640 | So we were just like, "All right.

00:47:04.680 | "Well, I mean, if they fixed it,

00:47:05.760 | "then in theory, we should be good."

00:47:07.680 | My wife moved in with our two kids.

00:47:09.680 | And then that week, ramen noodles and poop

00:47:12.800 | show up in our bathtub and it was a whole thing.

00:47:15.760 | And so lawyers got involved and it was a whole thing.

00:47:19.320 | And basically what happened was the seller's agent

00:47:23.120 | lied to us about the repair

00:47:26.040 | and basically never even told the plumber kind of thing.

00:47:28.720 | And so because we didn't get it re-scoped

00:47:31.840 | and while we didn't do it, while they owned it,

00:47:33.800 | it became a whole problem for us.

00:47:35.400 | So I would say, from a sewer scope standpoint,

00:47:38.640 | if you do have to make repairs,

00:47:39.960 | make sure you pay for two sewer scopes.

00:47:42.200 | - And what do you guys think about inspections

00:47:45.120 | when the seller's already done the inspections

00:47:47.360 | and they're in the disclosures?

00:47:48.600 | And it's, yeah, I remember when we bought this house,

00:47:50.680 | the disclosures were like, "Here's the building report.

00:47:52.960 | "Here's the roof inspection.

00:47:55.020 | "Here's the termite inspection."

00:47:56.400 | Like they were all there.

00:47:57.840 | Do you still recommend people go do them themselves also?

00:48:01.360 | - Usually not.

00:48:02.360 | Like the fear is, "Well, that's the seller's inspector."

00:48:05.680 | But the inspectors themselves are licensed professionals

00:48:08.520 | that don't really care who the seller is, who the buyer is.

00:48:11.100 | They just wanna make sure they don't miss anything

00:48:12.440 | so they don't get sued.

00:48:13.880 | So what I tell my clients

00:48:14.920 | when you're getting inspections someone else has done

00:48:16.960 | is call the home inspector and ask them like,

00:48:19.600 | "You can actually do that,

00:48:20.760 | "especially if you're the one who pays for the inspection.

00:48:22.620 | "But even if you're not, hey, I see in your inspection

00:48:25.300 | "line 9C2 shows this.

00:48:28.420 | "Is that something I should be worried about?"

00:48:30.180 | You get great information from home inspectors.

00:48:32.700 | They give you the context that's often missing,

00:48:34.660 | especially 'cause when you're first buying a house,

00:48:36.800 | or even if you've owned a lot of houses,

00:48:38.060 | like Rob, you could probably admit,

00:48:39.100 | we don't know what a lot of that stuff means.

00:48:41.740 | You see a report and it lists something,

00:48:43.300 | you're like, "Well, is that a bad thing or not a bad thing?"

00:48:45.580 | Just ask them, "Do you see this very frequently?

00:48:47.420 | "Oh yeah, every house has that issue

00:48:49.020 | "with the trusses in the attic or whatever the cases are."

00:48:52.460 | No, that's very concerning.

00:48:54.100 | That electrical system should not be wired that way.

00:48:56.580 | I rarely ever see that.

00:48:58.220 | That's a big problem.

00:48:59.580 | So having those conversations with the person

00:49:01.440 | that inspected the house, and then specifically asking,

00:49:04.400 | "Is this a common problem or is this concerning to you?"

00:49:07.320 | Or maybe, "When you looked at the house,

00:49:09.200 | "what stuff from this report stood out to you

00:49:11.940 | "in your experience?"

00:49:12.860 | Now you're getting 20 years of experience

00:49:15.000 | to that home inspector's perspective,

00:49:17.660 | benefiting you as the person buying the house.

00:49:20.040 | - I like it.

00:49:20.880 | I'm gonna rapid fire through a few things quick

00:49:22.660 | that I've done in this part of the process.

00:49:24.720 | One, we did get an inspection

00:49:26.940 | that said that there were termites.

00:49:28.300 | I got another inspection and found someone

00:49:30.360 | that was willing to crawl through a smaller hole

00:49:32.540 | than the original inspector was

00:49:34.300 | to figure out what was wrong and find local treatment

00:49:37.220 | that was gonna be less expensive.

00:49:38.380 | So I think anytime an inspection reveals something

00:49:41.060 | that could be expensive,

00:49:42.100 | it could be worth doing a second one.

00:49:44.540 | Another one is, I'm trying to figure out

00:49:47.120 | when we're trying to buy a home what the person cares about,

00:49:50.020 | because sometimes there's sellers

00:49:51.600 | that really just wanna close fast.

00:49:53.380 | Some want the most money.

00:49:54.940 | Sometimes someone might just wanna make sure

00:49:57.340 | that the house is gonna be taken care of by a good family.

00:50:00.820 | I find that if I could figure that out,

00:50:02.580 | either through the agent or some other way,

00:50:05.160 | maybe from some neighbors,

00:50:06.620 | sometimes we ask the neighbors about the sellers,

00:50:09.220 | you could try to optimize what you're doing.

00:50:11.820 | 'Cause if all you want, if you know what's important to them,

00:50:14.580 | if they care about fast close,

00:50:16.220 | then maybe that's the thing you optimize for.

00:50:18.940 | And my brother-in-law's tip was always,

00:50:21.680 | it's a lot easier to extend a fast close than you think.

00:50:24.240 | So if you say we're gonna close in 30 days,

00:50:25.980 | you need to push it back by day 30, it's a lot easier.

00:50:29.280 | I'm gonna throw a couple little things

00:50:31.940 | that I've thrown in contracts

00:50:33.400 | or learned and regretted not doing.

00:50:36.120 | I'm curious if there are any last things

00:50:37.440 | that you try to negotiate for.

00:50:38.520 | For me, I always had this rule when I bought a car

00:50:40.480 | that's like try to get them to throw in the floor mats.

00:50:42.820 | And for the home, I always love getting a little extra

00:50:45.880 | at the end of the deal,

00:50:46.760 | because you're looking at a house

00:50:48.160 | that the cost to throw in a few things is so small

00:50:50.500 | that even if someone's not willing to negotiate,

00:50:52.880 | you could sometimes get it.

00:50:53.920 | So we got all the lime trees

00:50:55.920 | that were technically staging included in our house.

00:50:58.520 | There was a nice stage TV in the living room,

00:51:00.720 | we got that thrown in.

00:51:01.720 | So I always like to throw in a little bit

00:51:03.880 | of few small things that at the end of the day,

00:51:06.080 | no one's gonna kind of blow a deal up over something small,

00:51:09.160 | but it feels really good.

00:51:10.200 | Every time we walk through our living room,

00:51:11.880 | like I didn't pay for that TV, like that TV was free.

00:51:14.720 | Yeah, I paid for the TV, I bought the house,

00:51:16.400 | but I feel like I didn't pay for the TV.

00:51:18.720 | And one that I've recently come across,

00:51:21.060 | so depending on how much you care about privacy and whatnot,

00:51:25.240 | I'm now in a situation where I'd prefer

00:51:27.240 | the whole world doesn't know where I live.

00:51:29.000 | And so one thing that you can do in advance,

00:51:32.640 | because it's a lot of work if you don't,

00:51:34.120 | is put into the contract that the agent needs to remove

00:51:37.400 | all of the home data, photos, descriptions from the MLS.

00:51:41.360 | Sometimes it can be a hassle

00:51:42.780 | to get them to go do it after the fact,

00:51:44.700 | but if you don't want all the pictures

00:51:46.080 | of the interior house online,

00:51:48.400 | you can write that into a contract,

00:51:49.800 | which is something that took me time,

00:51:51.880 | but I didn't do it in advance.

00:51:52.800 | And if you really wanna be private

00:51:54.560 | and you wanna buy a home in an LLC

00:51:57.000 | so that you kind of protect your identity where you are,

00:51:59.800 | you can't do that later.

00:52:00.960 | Like the records will always be there

00:52:02.480 | if you didn't do that in advance.

00:52:03.720 | So if you're in a situation where you think one day

00:52:06.400 | in the near future,

00:52:07.240 | you might not want people to find your address,

00:52:09.600 | buy the home in the LLC in advance.

00:52:11.760 | Don't buy it after,

00:52:14.820 | don't try to change that after the fact.

00:52:16.140 | 'Cause I have at least one friend

00:52:17.260 | who ended up just having to move

00:52:18.860 | because someone knew where his address was

00:52:20.740 | and there wasn't really anything he could do at that point.

00:52:23.180 | So those are a couple of mine.

00:52:24.380 | Any other small, quick wins

00:52:26.300 | that you can get when you're negotiating?

00:52:28.060 | - No, I think those are all pretty good.

00:52:29.860 | I think we covered basically everything.

00:52:32.700 | We talked about seller credits.

00:52:35.460 | I think it's important to note

00:52:36.940 | that you can have a little bit of flexibility

00:52:39.460 | with seller credits.

00:52:40.380 | Like let's say you can't see eye-to-eye with the seller

00:52:43.120 | and they don't want to give you a $5,000 seller credit

00:52:45.720 | to repair this one kind of thing

00:52:47.480 | that you think is a big deal.

00:52:49.200 | You could, in theory, raise the price by $5,000

00:52:52.040 | and then have them give you a credit for $5,000.

00:52:54.760 | And while they're not paying it for you,

00:52:57.140 | throwing that onto your mortgage

00:52:59.000 | is really gonna have a pretty minimal effect

00:53:00.860 | on your overall payment.

00:53:01.960 | I mean, probably less than a dollar is my guess.

00:53:04.360 | I don't really know.

00:53:05.200 | But that's always something you can do too

00:53:06.840 | if you need to make a deal work

00:53:08.420 | and you're really like, "Hey, this $5,000

00:53:10.380 | "is gonna kill the deal."

00:53:11.760 | You can always add it to the price of the house

00:53:13.120 | if you feel like you're getting a good enough deal.

00:53:15.080 | - That's a good strategy,

00:53:16.040 | especially if you don't have a ton of capital.

00:53:17.800 | In general, having 5, 10, 15 grand in the bank

00:53:20.600 | is more value to you than having 5, 10, or 15 grand

00:53:23.320 | added on to a $600,000 mortgage balance.

00:53:27.520 | When it comes to extras that you mentioned, Chris,

00:53:30.040 | one of the best things to do is to have your agent

00:53:32.080 | ask the listing agent,

00:53:33.320 | "Is there anything that the sellers

00:53:34.680 | "don't want to have to move?"

00:53:36.560 | You wouldn't think that would be a common thing,

00:53:39.220 | but many times, sellers, their biggest concern is,

00:53:42.060 | "I don't want to move all my crap."

00:53:43.860 | And if they don't want to take the bunk beds with them,

00:53:46.240 | or they have some patio furniture in the backyard

00:53:48.380 | that they were planning on replacing

00:53:49.980 | when they got something new,

00:53:51.060 | or they don't really love their couch,

00:53:52.780 | it's not worth moving because they have to spend

00:53:54.940 | a bunch of money to get it from one place to another,

00:53:57.280 | they may be happy to leave it for you.

00:53:59.580 | So just getting a list from them

00:54:01.140 | or what are all the things you don't want to take

00:54:02.900 | regarding furniture or stuff like that

00:54:05.600 | is something that you can get added.

00:54:08.620 | Like what you mentioned, Chris,

00:54:09.940 | sometimes there's TVs that they were just gonna get

00:54:12.480 | a new TV when they got to the new house,

00:54:14.100 | and you can have that added

00:54:15.740 | and just end up with some extra things

00:54:17.700 | to throw throughout the house.

00:54:18.780 | Doesn't hurt to ask.

00:54:19.940 | - Love that.

00:54:20.780 | Rob, you talked about mortgages.

00:54:21.620 | Let's talk quickly about financing.

00:54:23.540 | I know it's a big thing.

00:54:25.820 | Anything people need to be thinking about

00:54:27.540 | as they go through this process, getting a loan,

00:54:30.140 | getting pre-qualified, figuring out what they can afford?

00:54:32.980 | - Yeah, I think probably the first,

00:54:34.220 | I mean, there's a couple ways to look at it, right?

00:54:35.840 | So if you're buying conventionally,

00:54:37.240 | they're typically gonna look at what's called

00:54:38.760 | your debt-to-income ratio.

00:54:40.500 | So this is how much money you're paying

00:54:41.920 | every single month to debt servicers

00:54:43.800 | versus how much income you make.

00:54:45.480 | Now, I believe this is gross income.

00:54:47.640 | So let's say you make $10,000 a month,

00:54:50.520 | but all of your credit cards and your student loan payments

00:54:53.320 | and your car payments and the couch that you finance

00:54:56.240 | adds up to 4,500 bucks a month.

00:54:58.360 | That means that your debt-to-income ratio is 45%.

00:55:02.140 | And David, you probably know the exact number here,

00:55:04.680 | but typically lenders don't want you to have higher

00:55:07.460 | than a 45% DTI to make a deal work.

00:55:10.600 | Is that the correct figure, David?

00:55:12.800 | - It's sometimes lower than that,

00:55:13.960 | but that's the ceiling as high as most of them will go.

00:55:16.600 | - Yeah, yeah.

00:55:17.640 | So you wanna make sure that when you're analyzing a deal

00:55:19.620 | and seeing what you can qualify for,

00:55:21.280 | I mean, all lenders are basically gonna run

00:55:23.040 | this calculation for you.

00:55:24.800 | But just to put it into perspective,

00:55:27.560 | you don't want the payment of the house that you're buying

00:55:31.040 | to throw your DTI out of whack, right?

00:55:33.660 | If you're barely qualifying now,

00:55:35.460 | the debt that you're gonna have

00:55:36.660 | from the house that you're buying

00:55:38.220 | contributes to that DTI and what you're qualifying for.

00:55:40.820 | So make sure that that's something

00:55:42.660 | that you can kind of hone in ahead of time.

00:55:44.900 | And certainly don't go take out new credit cards

00:55:47.120 | and fill them up to buy new furniture before you close.

00:55:50.060 | That's a big mistake that I think a lot of people make

00:55:53.460 | on their first property.

00:55:54.900 | - Yeah, opening any line of credit

00:55:56.580 | is gonna screw up your debt-to-income ratio.

00:55:58.400 | And it often happens once the house is in escrow,

00:56:00.900 | now let's buy a new car to drive into our new garage.

00:56:03.620 | Let's go open a line of credits to buy a bunch of furniture.

00:56:05.700 | You're so excited.

00:56:06.620 | And then the entire escrow gets blown up

00:56:08.700 | because you were just at the peak

00:56:10.300 | of what you could afford

00:56:11.140 | if that new line of credit put you over.

00:56:13.100 | - Yeah, I mean, I'm a big fan of the points game

00:56:15.020 | and opening up cards and sign up bonuses.

00:56:16.960 | But when we're buying a home,

00:56:17.940 | it's like, let's put a hold on all of that,

00:56:21.300 | six months out just so I kind of have

00:56:23.140 | a nice clean slate there.

00:56:24.780 | And I'm not trying to take on any extra inquiries

00:56:26.880 | or anything like that.

00:56:29.340 | - When you're helping people find homes

00:56:30.740 | and look or looking for mortgages yourself,

00:56:32.900 | do you think a broker is an important part

00:56:35.020 | of that equation or not?

00:56:35.980 | It's something I've never actually worked with.

00:56:38.300 | I've always gone direct

00:56:39.220 | to a handful of financial institutions.

00:56:41.220 | - Yeah, and disclaimer, I am a mortgage broker,

00:56:43.760 | so I am partial towards them.

00:56:45.700 | But here's why I went that route

00:56:47.260 | instead of becoming what we call direct lenders.

00:56:49.060 | So what a lot of people do is they'll go to Wells Fargo,

00:56:50.980 | they'll go to Chase, they'll go to Bank of America,

00:56:53.660 | and they'll say, "What can you do?

00:56:54.860 | What's your rate?

00:56:55.700 | What are your closing costs?"

00:56:56.520 | And it gives you this feeling of productivity

00:56:57.880 | that you're out there shopping around.

00:56:59.540 | But as a broker, we're doing the same thing.

00:57:01.820 | We're going to Bank of America, we're going to Chase,

00:57:03.740 | we're going to all the same lenders you have,

00:57:05.700 | but they're probably giving us better pricing than you.

00:57:08.460 | And this is one of the kind of like the shady things

00:57:10.940 | about how the loan industry works.

00:57:12.660 | When you walk into Bank of America,

00:57:14.380 | 'cause that's where you bank and you know them

00:57:16.060 | and you're comfortable with them,

00:57:17.420 | they know that you're gonna bank with them

00:57:19.100 | because you're comfortable.

00:57:19.980 | They don't have to give you the best deal.

00:57:21.720 | But when they're working with a broker,

00:57:23.620 | they know that we are comparing them

00:57:25.200 | to all the other lending options,

00:57:26.540 | so they're gonna have to give us a good deal

00:57:28.360 | to get the business.

00:57:29.740 | So going to a broker will allow you to have them shop

00:57:34.400 | for all your different loan products

00:57:35.800 | and options that are available, save you time,

00:57:37.460 | and they're usually gonna get better pricing.

00:57:39.580 | - Can a broker still get deals where they're required

00:57:42.940 | to put a certain amount of assets at that institution?

00:57:45.000 | I know, at least with Wells Fargo, as your example,

00:57:48.100 | if you move some money into a brokerage account

00:57:49.900 | with Wells Fargo, you get a better rate.

00:57:51.940 | Do brokers still negotiate those kinds of deals as well?

00:57:54.980 | - Those are uncommon now.

00:57:56.700 | We were seeing those with jumbo loans.

00:57:58.400 | There was a time where you could get a better rate

00:58:00.020 | on a jumbo loan if you put a significant amount of money

00:58:02.340 | in with the bank.

00:58:03.620 | And we would just tell our clients like,

00:58:04.860 | "Hey, if you're looking for a jumbo loan in this market,"

00:58:07.100 | it's not the case right now,

00:58:07.940 | but at the time, especially during COVID,

00:58:09.860 | you're better off just to go to that bank.

00:58:11.500 | You're gonna get a better rate on jumbo products

00:58:13.620 | than you would be right here.

00:58:14.460 | But you're gonna have to put 100 grand in a bank.

00:58:16.580 | They're gonna schedule a meeting for you

00:58:17.820 | with one of their financial advisors

00:58:19.100 | 'cause they want you to take that 100 grand

00:58:20.540 | and go buy mutual funds through them

00:58:21.900 | and they're gonna make money that way.

00:58:23.660 | So if you get an honest broker,

00:58:25.620 | we don't wanna waste our time working on somebody

00:58:28.220 | who we can't get them a good loan product.

00:58:29.980 | We're pretty good at just telling people upfront,

00:58:32.780 | "For what you wanna do, we don't have a product like that."

00:58:35.780 | For years, we didn't do commercial lending.

00:58:37.640 | So we would refer people to the best commercial lender

00:58:39.660 | we knew and so we got set up with a commercial lender

00:58:42.020 | and now we can do it.

00:58:42.860 | So if you do have one of those special opportunities,

00:58:46.620 | sometimes physicians can get special loans

00:58:49.120 | through a credit union that is geared towards physicians.

00:58:52.100 | Yes, there's an angle, but for your average person,

00:58:55.540 | there's not a ton of those opportunities.

00:58:56.980 | - And David, just for reference,

00:58:58.500 | how much is, what makes something a jumbo loan?

00:59:01.940 | - Yeah, that's a good point.

00:59:03.060 | Every area has a different,

00:59:04.820 | what they call it like a conforming limit.

00:59:06.600 | This is how much you can borrow

00:59:07.880 | before it's considered to be risky.

00:59:10.340 | So a mortgage broker or a loan officer can tell you

00:59:13.260 | what the Fannie Mae, Freddie Mac guidelines are

00:59:15.580 | for that area.

00:59:16.540 | You might even be able to look that up online.

00:59:18.260 | But a loan balance above a certain amount,

00:59:20.260 | depending, it's obviously higher in the Bay Area,

00:59:22.740 | California than it's gonna be in Topeka, Kansas.

00:59:25.500 | But it's a proportional amount.

00:59:27.100 | And then once you have to get a loan balance

00:59:29.700 | higher than that,

00:59:30.520 | you're not gonna get a Fannie Mae, Freddie Mac loan.

00:59:32.660 | You're gonna get a loan that comes from private investors

00:59:35.160 | that have pooled their money in capital markets.

00:59:37.540 | They're going to give you the loan

00:59:38.380 | that they're going to sell that

00:59:39.500 | as a mortgage-backed security somewhere else.

00:59:41.180 | So that's why the rates are usually a little bit higher

00:59:42.940 | on jumbo loans.

00:59:43.780 | They're riskier for the person lending you the money.

00:59:46.540 | - Yeah, that makes sense.

00:59:47.380 | - I think the Bay Area, it's like high six figures.

00:59:49.420 | - Yeah, that makes sense.

00:59:50.260 | - Is the threshold, I think.

00:59:51.820 | - Yeah, it goes up every year, usually, too.

00:59:53.820 | - Okay, yeah, it's been a few years for me.

00:59:56.300 | And how do you think about

00:59:57.140 | how much people should be putting down?

00:59:58.620 | Or maybe if you have a different thing,

00:59:59.580 | you can drop us your thoughts on that.

01:00:01.340 | - I think it's gonna probably depend on the use case, right?

01:00:04.100 | So if it's a primary, you can get into a primary

01:00:06.700 | for as low as 3.5% down.

01:00:08.840 | Unless it's a jumbo loan, I don't think you can do that.

01:00:12.260 | There are limits on those as well,

01:00:13.700 | the FHA Fannie Mae guidelines.

01:00:15.620 | So make sure to look those up.

01:00:16.580 | Those are pretty easy to look up.

01:00:18.180 | - I think it's totally fine to get into your starter home

01:00:20.100 | for 3.5%.

01:00:21.340 | I did.

01:00:22.180 | I got into my first $159,000 house

01:00:24.840 | for like six or seven grand.

01:00:26.820 | And that house ended up being the catalyst

01:00:30.540 | for my entire portfolio.

01:00:32.180 | I think if you're looking at investment properties,

01:00:34.660 | you could go as low as 10% with a second home loan.

01:00:37.620 | That's still gonna be under your name and your income

01:00:39.860 | and everything like that.

01:00:41.060 | And then once you go that traditional route,

01:00:42.580 | if you're going more traditional real estate,

01:00:44.940 | 20% down seems to be the gold standard.

01:00:47.700 | You could, sometimes it's gonna be asked that you do 25%.

01:00:51.340 | Not really a fan of putting 25% down personally.

01:00:54.560 | If I can get in for 10% on a second home loan,

01:00:58.220 | pretty happy.

01:00:59.220 | I'll do 20% though on an investment loan.

01:01:01.940 | That seems to be more common these days.

01:01:04.380 | - So I like to put that into an apples to apples comparison.

01:01:06.900 | In general, if you're an investor

01:01:10.140 | or like a real estate investor,

01:01:11.700 | having more capital is better,

01:01:13.660 | but it depends where interest rates are.

01:01:14.980 | So for example, when the rates are at 6%,

01:01:18.180 | to save an extra $40,000

01:01:20.620 | and put that towards your down payment

01:01:22.020 | is gonna save you $240 a month.

01:01:25.020 | When rates were at 3%,

01:01:27.620 | it would only save you $169 a month.

01:01:30.740 | So we saw this phenomenon

01:01:32.100 | where people were trying to save more money

01:01:33.660 | to get their payment lower, get their payment lower,

01:01:35.780 | but prices were rising faster than they could save money.

01:01:38.780 | It actually ended up being a poor financial decision

01:01:41.380 | to try to save more money to put money down.

01:01:43.740 | So if rates, you know, if they jump up to say 12%,

01:01:47.060 | now you're talking about $411 a month.

01:01:52.340 | That might make sense to put more money down,

01:01:54.460 | but interest rates though, they're higher than they were.

01:01:56.660 | They are still traditionally very low

01:01:59.540 | compared to where they've been for a long time.

01:02:01.220 | So putting more money down

01:02:02.260 | doesn't help you as much as you'd think.

01:02:04.100 | - And don't forget, you know,

01:02:04.940 | up to $750,000 of mortgage interest deductible

01:02:08.700 | as a primary residence.

01:02:10.100 | So that mortgage interest comes off, you know,

01:02:12.740 | a little bit in your tax return.

01:02:13.900 | Obviously, I'm not an accountant.

01:02:15.060 | Feel free to talk to a CPA.

01:02:16.620 | And then a hack for anyone who's making large purchases

01:02:20.540 | and has lots of money that isn't talked about too often,

01:02:23.380 | but I'll share on the personal side is that

01:02:26.060 | if you borrow money and you use that money to invest

01:02:30.900 | in anything, whether it's stock market, bonds, whatever,

01:02:35.700 | that interest is deductible as investment interest expense.

01:02:38.180 | Again, not a CPA, talk to your lawyer.

01:02:40.420 | I'll put a link in the show notes.

01:02:42.340 | But so I know people that have been able to, you know,

01:02:45.260 | buy a house in cash and then recoup, you know,

01:02:48.620 | do the mortgage a day later

01:02:51.260 | and then take that mortgage and invest it.

01:02:53.300 | So one thing we did to kind of do this strategy

01:02:56.980 | a little bit was we liquidated

01:02:58.580 | a lot of our personal investment savings,

01:03:01.180 | bought more of the house than we could,

01:03:03.340 | and then immediately financed more of it

01:03:05.100 | and put that money back in our investment account.

01:03:07.980 | And by doing that, we could go over

01:03:10.620 | the deductible mortgage interest limit

01:03:12.700 | because that extra mortgage interest

01:03:14.780 | was actually being classified as investment interest

01:03:17.340 | because it was being used for the purpose of investing.

01:03:19.420 | So I'm not gonna go down that rabbit hole,

01:03:22.540 | but, you know, I know people who have, you know,

01:03:25.500 | multi-million dollar mortgages that are 100% deductible.

01:03:28.580 | And you could deduct that interest

01:03:30.180 | against investment returns and investment gains,

01:03:32.620 | whether it's capital gains or interest income

01:03:34.300 | or anything like that.

01:03:35.260 | There's also a ton of awesome tax hacks

01:03:37.980 | when it comes to commercial property.

01:03:39.620 | I know you guys did an episode all about the way

01:03:42.460 | to do real estate and not pay taxes

01:03:45.900 | when you're doing it for investment properties.

01:03:47.820 | I don't remember the episode number,

01:03:48.940 | but we'll link to it in the show notes for sure,

01:03:50.620 | because I know you guys have gone deep on that

01:03:52.220 | on the commercial side.

01:03:53.100 | But there is a hack here if you have cash on hand,

01:03:55.860 | or even if your house is appreciated and you have equity,

01:03:59.100 | you can refinance, take cash out of your house.

01:04:02.300 | And as long as you invest that cash out refinance money,

01:04:05.420 | that extra mortgage interest will also be usually,

01:04:09.060 | talk to your CPA,

01:04:10.980 | classified as investment interest expense and be deductible.

01:04:13.060 | Yeah, you can write off the interest

01:04:14.260 | and you don't get taxed on the money that you took out.

01:04:16.700 | - Yeah. - Yeah.

01:04:17.540 | - I will say, I actually remember the episode

01:04:19.460 | off the top of my head.

01:04:20.340 | I have every single episode memorized.

01:04:22.140 | It was 689, our "Bigger Pockets" episode

01:04:25.500 | with Matt Bontrager, who is an awesome CPA.

01:04:29.060 | - So there's probably a lot more we could do.

01:04:30.860 | I could, in fact, probably do an entire episode

01:04:32.740 | on each one of these topics we went to.

01:04:34.620 | And maybe that's the follow-up,

01:04:36.100 | is we have a series of extra deeper, deeper dives

01:04:39.380 | on each one.

01:04:40.340 | But I wanna get to, you've closed on this.

01:04:43.060 | Now we've got the financing, we closed.

01:04:44.620 | Any last things that you need to be thinking about?

01:04:46.500 | We made an offer, we secured our loan

01:04:50.020 | as we're wrapping up the process of buying home.

01:04:51.980 | Is there anything else there?

01:04:52.980 | Or is it really just kind of closes

01:04:54.340 | and that's all that happens?

01:04:56.620 | - You know what, David, you actually,

01:04:58.660 | you gave a very good tip the other day

01:05:00.500 | about keeping your documents into one place.

01:05:02.900 | You think you could run us through that?

01:05:03.900 | Because when you said it, I was like, "Oh my God."

01:05:06.100 | It's so easy.

01:05:06.940 | Why doesn't everyone do this

01:05:08.060 | before they apply for a mortgage?

01:05:10.140 | - So when you're getting ready

01:05:10.980 | to buy a house in the first place,

01:05:12.460 | a lot of people hate the pre-approval process.

01:05:14.300 | It's like pulling teeth.

01:05:15.140 | You have to go get your pay stubs,

01:05:16.580 | you have to get bank statements,

01:05:18.060 | you have to find your tax returns.

01:05:19.740 | Well, who knows where their tax returns are most of the time?

01:05:22.260 | And if you're not used to navigating

01:05:23.780 | your company's HR website to get pay stubs,

01:05:25.980 | it can take three hours to figure that thing out.

01:05:27.940 | It's very frustrating.

01:05:29.340 | So the advice that I give to all of our clients

01:05:31.180 | and what I do myself,

01:05:32.420 | I create a Google folder in Google Drive

01:05:35.020 | with that information.

01:05:36.060 | And I just, when I download those documents,

01:05:37.940 | I stick it in that folder.

01:05:39.460 | And that way, if you decide that you wanna get pre-approved

01:05:41.500 | with several different lenders,

01:05:42.420 | if you're gonna use the method like Chris was saying,

01:05:44.020 | where you're talking to different people,

01:05:45.260 | you're sending the same stuff to everybody.

01:05:46.740 | It's really easy.

01:05:47.940 | Then when I close on a house,

01:05:49.540 | I open another Google Drive folder for every address.

01:05:52.620 | And I keep all the information

01:05:54.420 | for every house in that folder.

01:05:56.660 | It is incredibly simple when you do it.

01:05:58.820 | So we get our loan documents, I stick it in there.

01:06:00.860 | All the inspection reports, I stick it in there.

01:06:03.260 | The disclosures for the house, they're gonna go in there.

01:06:05.620 | The mortgage note, every piece of information,

01:06:08.220 | the property management agreement,

01:06:09.500 | if I'm gonna manage the property,

01:06:10.780 | the work from the contractor,

01:06:12.220 | the scope of work and how much I paid them.

01:06:14.260 | Whatever it is, it all goes in that same folder.

01:06:16.780 | And then if I ever need it,

01:06:17.780 | I know exactly where to go to get it.

01:06:19.820 | - I love that.

01:06:21.020 | I did not do that in the first house.

01:06:23.220 | And you had to go back and track down the mortgage docs.

01:06:25.420 | And I was surprised that just because you sign

01:06:28.140 | a lot of these mortgage docs in person,

01:06:29.860 | I didn't get a copy without requesting them

01:06:32.260 | as an attachment in my email.

01:06:34.780 | It was in some secure thing that wasn't easy to access.

01:06:37.780 | That's one.

01:06:38.620 | And then the last other thing I put in that folder.

01:06:39.860 | So now I have that folder.

01:06:41.340 | I would say, put a Google sheet in that folder,

01:06:44.060 | Excel file, whatever.

01:06:45.140 | And every time you make any expenditures

01:06:47.860 | to improve the house, make sure you write it down

01:06:50.460 | because we just did a renovation

01:06:52.660 | and that kind of sparked this idea.

01:06:54.420 | But at the end of the tenure at a house,

01:06:57.780 | when you sell it,

01:06:58.620 | you take the amount that you made

01:07:00.460 | from the house selling it,

01:07:01.460 | you subtract the amount that you spent to buy it.

01:07:03.340 | And that's your kind of gain on the house,

01:07:05.220 | but you can deduct all the improvements

01:07:06.980 | you made to that house.

01:07:08.380 | And so it might seem small at the beginning,

01:07:10.660 | maybe you just redid some floors,

01:07:12.300 | but those things add up over the life of the house.

01:07:14.580 | And I think it's really helpful

01:07:15.700 | if just right as soon as you close,

01:07:17.180 | you have one place you can start to track every improvement

01:07:20.140 | and every expense you put to improve that house

01:07:22.420 | so that you can save on the taxes at the end.

01:07:25.460 | - And if you ever want to sell that house,

01:07:26.940 | as something you can show the next buyers of the property,

01:07:29.340 | here's all the improvements that we made

01:07:30.620 | over the time we had the home and here's the receipts.

01:07:33.580 | - Speaking of tracking all this stuff

01:07:35.220 | and storing documents,

01:07:36.380 | there's one thing after you buy this house

01:07:38.780 | that's very important

01:07:39.740 | is to make sure you get that house insured.

01:07:41.540 | And I just did a really deep dive on insurance.

01:07:44.260 | I went through every policy,

01:07:45.940 | talked to multiple brokers, multiple companies.

01:07:47.820 | I tracked a lot.

01:07:48.660 | I probably spent 50 hours on insurance.

01:07:50.780 | And I wanted to share a few things.

01:07:53.820 | Any thoughts from you guys quick on insurance

01:07:55.900 | or should I jump in?

01:07:57.140 | - No, let's do it.

01:07:57.980 | But I do want to say I listened to it, dude.

01:07:59.900 | I mean, it is clear you put 50 hours of research into it.

01:08:03.180 | And as the keeper of all the episodes,

01:08:05.340 | you can find that episode of all the hacks.

01:08:07.300 | That's number 104.

01:08:08.820 | So make sure to go listen to that after you listen to this.

01:08:11.900 | Make that be the first thing you listen to

01:08:13.700 | 'cause I promise you it will answer all of your questions

01:08:16.100 | as it pertains to homeowner's insurance.

01:08:18.580 | - And more.

01:08:19.420 | I think that every time someone sends me an email

01:08:21.980 | on how much they saved after listening to that episode,

01:08:24.060 | I write it down.

01:08:24.900 | My stack rank is currently at $14,000.

01:08:27.340 | So if you listen to that episode

01:08:29.020 | and you save more than $14,000, absolutely reach out.

01:08:32.500 | I want to put you at the top of the leaderboard.

01:08:34.980 | Our goal is to save people as much as possible.

01:08:37.260 | That's part of the theme of the show.

01:08:38.340 | But one of the things that I think is really important

01:08:40.860 | is when we bought this home,

01:08:42.460 | the amount that we could insure the home for

01:08:45.540 | was not what I thought was an appropriate amount.

01:08:47.900 | So there are multiple people that have a requirement.

01:08:50.060 | The lender is going to have some requirement

01:08:51.660 | that you insure the home enough.

01:08:52.980 | The insurance company will.

01:08:54.340 | But at the end of the day,

01:08:55.180 | that insurance is there to make sure

01:08:57.060 | that you can rebuild that home if something happens.

01:08:59.500 | And I asked around from some real estate agents I knew

01:09:02.900 | how much it would cost to buy a teardown and build a house.

01:09:05.300 | And I asked a builder.

01:09:06.620 | And the numbers they gave me were about 20% more

01:09:09.740 | than the cost estimator that the insurance company gave me.

01:09:13.260 | And they were more than what our lender wanted us

01:09:16.660 | to have the home insured for.

01:09:18.600 | So for me, I didn't want to deal with that risk.

01:09:21.080 | So I actually just increased the coverage on the home.

01:09:23.680 | So my home is insured for more than the minimum

01:09:26.260 | that they required.

01:09:27.620 | And one way to increase that total number

01:09:30.560 | that's cheaper than just insuring it for more

01:09:32.860 | is looking for extended reconstruction

01:09:34.880 | as an add-on to your policy.

01:09:37.040 | So that will cover you for anywhere from 25 to 100%

01:09:41.580 | of the cost of your home.

01:09:42.960 | So if you have a home that's worth 500 grand

01:09:45.620 | and you insure it for 500 grand,

01:09:46.900 | but you add 50% extended reconstruction,

01:09:49.900 | up to 750 to repair it if building materials go up

01:09:53.220 | or something changes in the time,

01:09:55.700 | you'll get a little bit of extra coverage there.

01:09:57.660 | So I think that's something really important

01:09:59.620 | to think about as you go through that.

01:10:01.080 | - Yeah, that's really cool.

01:10:01.920 | I never thought about that.

01:10:03.460 | - Insurance, I'll just say this little line here

01:10:06.220 | because we don't have time to get into it.

01:10:07.860 | It's becoming increasingly difficult to get

01:10:10.460 | and significantly more expensive.

01:10:12.660 | I'm literally starting an insurance company right now

01:10:14.700 | because it has been so hard to find this.

01:10:17.320 | And I didn't realize until I just bought a lot of real estate

01:10:19.340 | how bad it's getting in certain states.

01:10:21.100 | There are certain areas where you're looking at homes

01:10:23.260 | that you will literally not be able to get insurance

01:10:26.020 | if you plan on making it a short-term rental.

01:10:28.500 | Florida is notorious for this.

01:10:30.460 | I had a quote on a property I bought in Florida

01:10:33.020 | that was $26,000 a year for an insurance policy.

01:10:37.220 | I mean, that is a mortgage payment on a normal home

01:10:40.380 | and some California problems as well.

01:10:42.260 | So in your due diligence process,

01:10:44.700 | we used to treat insurance like just an afterthought,

01:10:46.860 | like, oh yeah, yeah, my loan officer

01:10:48.220 | will connect me with someone.

01:10:49.100 | I'll look at policies, I'll pick one.

01:10:50.660 | No, you gotta make sure before you close on that house

01:10:53.100 | that you can get insurance

01:10:54.500 | and that it will be insured for as much as you will need

01:10:56.900 | if something goes wrong.

01:10:57.780 | Great point there, Chris.

01:10:59.180 | - Yeah, absolutely.

01:11:00.020 | Tahoe is another area like that

01:11:01.180 | where I know people who have very, very high costs.

01:11:03.060 | And even in the Bay Area, because of the fires,

01:11:05.480 | there are a bunch of insurance carriers

01:11:07.280 | that just won't insure.

01:11:08.580 | Travelers told me, "We can't insure your home."

01:11:10.380 | We're like, we're not even in a real wildfire area,

01:11:12.660 | but we're off their list.

01:11:13.740 | - Yeah, there's a BRRRR project that we're working on

01:11:15.560 | that we're gonna do a show on in the future.

01:11:17.580 | We did one previously.

01:11:18.900 | I could not get insurance for fire.

01:11:21.380 | I had to go through the state.

01:11:22.820 | The state had to create its own insurance program

01:11:25.100 | because providers were not providing it to people.

01:11:29.060 | And no, you can't get a loan in most cases

01:11:31.100 | if you don't have fire insurance on a property.

01:11:32.860 | So people don't talk about it very often,

01:11:34.720 | but it's a pretty significant problem that's going around.

01:11:36.660 | I'm glad you brought it up.

01:11:37.880 | - Yeah, I'll give a couple quick ones

01:11:39.460 | and then obviously check out this episode

01:11:40.860 | if you wanna go deep and save money on insurance.

01:11:43.740 | Bundling, not always the best deal.

01:11:45.880 | So a lot of people think,

01:11:46.720 | "Oh, I'm just gonna get my home insurance

01:11:48.020 | with the same company that does my auto insurance."

01:11:50.020 | We found that many carriers, that was not the case.

01:11:54.580 | And we probably looked at 15, 20 carriers.

01:11:57.060 | So don't just assume that that's the right thing.

01:11:59.820 | Also, don't just assume that your carrier

01:12:01.780 | that you've had for five years,

01:12:03.140 | because they have their,

01:12:04.500 | you've been a customer forever discount,

01:12:06.420 | is actually cheaper.

01:12:07.700 | I found that to definitely not be the case in our situation.

01:12:11.480 | Also, don't forget that now you own a home,

01:12:14.520 | there's a chance that that home has,

01:12:16.260 | either now or in the future, increased your net worth enough

01:12:19.260 | that it might be worth looking at a umbrella policy

01:12:22.740 | that goes beyond the value of the home

01:12:25.160 | or your homeowner's insurance.

01:12:26.540 | And that will also extend to your auto insurance.

01:12:28.860 | So I think there are a lot of people out there

01:12:30.660 | that buy a home, it appreciates over time,

01:12:33.100 | their net worth grows and grows and grows,

01:12:35.060 | and they're driving around

01:12:36.180 | and they haven't updated their auto policy

01:12:38.140 | and they have $100,000 of liability insurance.

01:12:40.960 | So get in a car accident,

01:12:42.580 | something happens terrible

01:12:45.040 | and someone sues you for more than that.

01:12:46.700 | Well, it turns out that you have more assets

01:12:48.540 | and if you don't have an umbrella policy

01:12:50.420 | to sit on top of your auto policy or your home policy,

01:12:53.460 | you could find yourself in a not great situation.

01:12:55.620 | And there are some states

01:12:56.900 | where you're even able to sue someone

01:12:58.780 | for their future earnings.

01:12:59.900 | So you really wanna make sure that as you kind of,

01:13:03.340 | we're talking about real estate,

01:13:04.260 | we're talking about building wealth,

01:13:05.500 | as you cross that threshold to,

01:13:07.340 | now I'm starting to build my wealth,

01:13:09.140 | I think it's equally as important to protect that wealth.

01:13:11.380 | And so that's something that it's very inexpensive.

01:13:15.780 | We're talking $100, depending on how much you need

01:13:19.520 | to protect yourself up to like a million dollars a year.

01:13:23.460 | I think it's something people should be considerate.

01:13:25.380 | And then last, you buy this home, wait till you move in.

01:13:28.720 | After you've moved in,

01:13:31.140 | go around the house with a camera or your phone

01:13:33.800 | and just take a video of everything in the room

01:13:35.560 | and just document all the stuff you own.

01:13:37.720 | Because it's gonna save you a ridiculous amount of time

01:13:40.280 | if anything were to happen, burn down, burglary,

01:13:43.040 | you probably didn't save the receipts

01:13:44.820 | for everything you own.

01:13:45.900 | So take five minutes,

01:13:47.340 | make your own MTV crib style video running around,

01:13:50.840 | sharing everything in your house just in case,

01:13:52.800 | so you have that on hand.

01:13:53.720 | I think that's pretty important as well.

01:13:55.360 | - I've had to go through that process before

01:13:57.040 | and I did not do that.

01:13:58.560 | Gosh, it was horrible.

01:14:01.400 | It was horrible.

01:14:02.480 | And you gotta show receipts and you gotta show photos

01:14:05.320 | and you gotta look through thousands of photos

01:14:07.420 | on your camera roll for like,

01:14:09.040 | so trying to find that family picture you took

01:14:11.900 | with the flat screen in the background.

01:14:14.040 | Just walk through, make that video.

01:14:15.780 | I got a bunch of other tips,

01:14:16.760 | but we've been doing a lot in this episode.

01:14:18.960 | And I think anyone who's looking to buy a home

01:14:21.000 | is absolutely going to be able to get a better deal,

01:14:23.200 | find a better home, find the right home

01:14:25.360 | and get through that process easier.

01:14:27.520 | This has been so helpful.

01:14:28.880 | I'm so glad we got to do this episode.

01:14:30.560 | I feel like there's more things we could break down,

01:14:33.040 | but at this point, I feel like this is a good stopping point.

01:14:36.160 | Is there any last bits of wisdom

01:14:38.200 | that you guys wanna share to anyone

01:14:39.800 | thinking about going through this process?

01:14:41.560 | - Yeah, there's a thing that I mentioned

01:14:42.700 | to a lot of people who say,

01:14:43.540 | "I don't wanna be a real estate investor,"

01:14:45.000 | or "Renting is cheaper than owning."

01:14:47.220 | It often is.

01:14:48.240 | In most cases, if you buy a home,

01:14:49.720 | the mortgage is gonna be more than the rent in year one.

01:14:52.840 | But go back to what rents were five years ago,

01:14:54.880 | 10 years ago.

01:14:56.080 | Are you telling me that the mortgages from 10 years ago

01:14:58.800 | are more expensive than rents today?

01:15:00.800 | It's hardly ever the case.

01:15:02.200 | So when you take the longer term approach,

01:15:04.200 | even if you're not a real estate investor

01:15:05.640 | looking to rent out a property,

01:15:07.520 | buying a home and locking in a mortgage,

01:15:09.520 | especially with all the inflation we have,

01:15:11.280 | will always be cheaper for you in the long run.

01:15:14.120 | If you look at what your parents are paying on the house

01:15:16.120 | that they bought 25 years ago,

01:15:18.380 | those payments are laughable,

01:15:19.520 | but at the time they bought it,

01:15:20.480 | they thought it was expensive.

01:15:21.560 | So I often tell people,

01:15:22.600 | even if they don't wanna be

01:15:24.100 | a quote-unquote real estate investor,

01:15:26.160 | you should still buy a house

01:15:28.320 | and make sure that you've taken control

01:15:30.320 | of your financial future.

01:15:31.280 | You're not in the hands of landlords

01:15:32.840 | that can raise rent every year.

01:15:35.200 | My only caveat there would be,

01:15:36.800 | given the fees that you pay to an agent

01:15:39.360 | when you're selling the house

01:15:40.560 | and to the buyer's agent as well,

01:15:43.140 | if you're gonna buy a home

01:15:43.980 | and you're gonna be there for a year or two,

01:15:45.320 | you might not make money

01:15:46.380 | if you plan on selling it in a year or two,

01:15:48.200 | given the fees that are associated with that process.

01:15:51.160 | However, my advice,

01:15:52.940 | and this will lead us to an episode on both of our shows

01:15:55.360 | about house hacking is,

01:15:57.200 | there are ways if you think,

01:15:58.800 | gosh, I can only really afford a two-bedroom house,

01:16:02.100 | but we're about to start a family

01:16:03.240 | and we're gonna need a bigger house in a few years,

01:16:05.040 | what do I do?

01:16:06.280 | There are ways to buy the four-bedroom house

01:16:08.120 | or the duplex that you might one day need

01:16:09.840 | for your whole family or something like that now,

01:16:12.400 | use tactics that you guys have talked about,

01:16:14.840 | we've talked about in multiple episodes

01:16:16.320 | that we'll link in the show notes on house hacking,

01:16:18.040 | to be able to get that house

01:16:19.320 | that two, three, four, five years from now

01:16:21.120 | is the house you want and get it earlier,

01:16:24.080 | increase some cashflow from it

01:16:25.560 | so you can afford it for those next three or four years

01:16:27.680 | while it's more space than you need.

01:16:29.600 | And I think that ends up allowing you

01:16:31.280 | to buy your 10, 15, 20, 30-year home

01:16:34.120 | before you're ready for all that space

01:16:36.160 | and not be in a situation

01:16:37.480 | where you either can't buy the home

01:16:39.400 | or you've got to buy a home and sell it in a few years.

01:16:41.400 | So we've both done episodes on it,

01:16:43.240 | there's a number of tactics there.

01:16:45.040 | I think you can even use that income from your house hack

01:16:48.420 | to end up qualifying for income on your DTI

01:16:51.640 | for rent for your mortgage.

01:16:53.120 | So I think there's some really great stuff there.

01:16:55.860 | Obviously, we've both done episodes on it,

01:16:57.480 | but there's a lot of stuff there.

01:16:58.360 | We did that in San Francisco

01:16:59.560 | and that helped us buy a three-bedroom place

01:17:01.320 | when we really only needed a one-bedroom.

01:17:03.080 | - Yeah, house hacking is,

01:17:04.960 | I will always thank house hacking for giving me my start.

01:17:07.800 | It is the catalyst for all wealth and real estate,

01:17:10.600 | my deep, deep belief.

01:17:11.760 | So yes, go listen to both those episodes.

01:17:14.320 | If you were closed off to the idea,

01:17:16.040 | I promise after you listen to them,

01:17:17.900 | you're gonna be all in.

01:17:19.160 | - Awesome, this has been fantastic.

01:17:21.160 | I guess thank you for being here,

01:17:22.480 | thank you for having me here,

01:17:23.680 | thanks for doing this kind of fun episode,

01:17:26.100 | and I hope we get to have a conversation

01:17:27.520 | like this again soon.

01:17:28.640 | - Same. - Yeah, Chris,

01:17:29.460 | for people in our audience

01:17:30.300 | that wanna learn more about you, where can they find you?

01:17:32.640 | - Yeah, I'm at AllTheHacks in the whatever podcast app

01:17:36.120 | you're listening to this on, on the internet.

01:17:38.600 | Fortunately, not too common of a term.

01:17:40.880 | So if you like optimizing real estate,

01:17:42.560 | but you're interested in optimizing your life,

01:17:44.920 | your health, your money, your travel,

01:17:47.560 | I'm one of those crazy people with 10 million points

01:17:49.680 | and play the game hard, travel the world for free.

01:17:51.760 | If any of that is something you wanna do,

01:17:53.680 | come on over, have a listen, AllTheHacks.

01:17:56.000 | I'd love to have you there.

01:17:57.000 | I'd love to hear from you, reach out to me anywhere.

01:17:59.600 | I just love having new people in the community.

01:18:02.320 | What about you guys, for our listeners?

01:18:04.060 | - For anyone who's been charmed and bedazzled

01:18:05.840 | by your amazing personality, where can they find more?

01:18:08.240 | - You can find me over at Rob Built on YouTube,

01:18:11.480 | Rob Built on Instagram,

01:18:12.800 | and on the Apple Podcasts review platform

01:18:15.640 | where you'll be leaving us a five-star review

01:18:17.900 | if you like what we do and if you want our content

01:18:20.260 | to be served up to millions of other people

01:18:22.900 | who get the benefit of learning about financial freedom.

01:18:26.760 | What about you, David?

01:18:27.680 | - Find me at davidgreen24.com,

01:18:29.360 | see everything I got going on,

01:18:30.760 | or your favorite social media or YouTube platform,

01:18:33.740 | davidgreen24, E at the end of green.

01:18:36.000 | - And you guys forgot the most important thing,

01:18:37.760 | which is, if you're listening to this on AllTheHacks,

01:18:39.760 | go check out the BiggerPockets Real Estate Podcast.

01:18:42.000 | - Well, that goes without saying.

01:18:43.260 | - Of course.

01:18:44.100 | - Yeah, if you like this stuff.

01:18:44.920 | - I just gotta remind everybody 'cause...

01:18:47.000 | - Yeah, we've got almost 800 episodes of content

01:18:49.400 | just like this if you wanna learn

01:18:51.160 | how to make money through real estate.

01:18:53.080 | And Chris, I will say, I have a book coming out

01:18:54.720 | through BiggerPockets Publishing in October

01:18:57.020 | that's gonna be called "Pillars of Wealth,"

01:18:58.760 | and it's all about saving money, making money,

01:19:01.300 | and investing the difference.

01:19:02.320 | And so much of what you've talked about,

01:19:04.080 | I echo the sentiments in that book.

01:19:06.080 | It is incredibly important to be a wise steward

01:19:08.440 | of your resources if there's ways you can save money

01:19:10.680 | through credit card hacking, travel hacking,

01:19:12.560 | food hacking, everything.

01:19:14.680 | Take advantage of that.

01:19:16.080 | The people who manage their money well

01:19:18.100 | tend to be rewarded by the money gods who bring more.

01:19:20.840 | So I love what you're doing, thank you for doing it,

01:19:22.960 | and I'm glad our audience got to hear about it.

01:19:24.920 | - Yeah, I'm glad I'm here.

01:19:26.020 | And I like what you're talking about

01:19:27.720 | because building wealth is not always

01:19:29.160 | about sacrificing everything.

01:19:31.080 | And so I think my goal is to help people live a life

01:19:33.960 | they really wanna live, just live it for less.

01:19:35.960 | - Yeah, that's awesome, exactly.

01:19:37.920 | - Yeah, and on that note, there's an episode

01:19:39.560 | I think everyone listening on the BiggerPockets side

01:19:42.200 | should check out.

01:19:43.020 | I did this episode with Bill Perkins

01:19:44.920 | who wrote a book called "Die With Zero."

01:19:46.680 | And it's radically reframed my perspective

01:19:50.560 | on basically all things wealth,

01:19:52.800 | spending money and everything.

01:19:53.800 | It really wanted to focus on what's important,

01:19:56.600 | maximizing my net fulfillment,

01:19:58.320 | not necessarily my net worth.

01:19:59.960 | And so if I leave people with...

01:20:01.520 | Obviously, if you wanna optimize your insurance

01:20:03.160 | and save money, go there.

01:20:04.200 | You wanna travel for free, where's episodes there.

01:20:06.720 | But if you wanna just kind of like

01:20:08.280 | really kick your entire perspective on money around

01:20:12.440 | and think about whether there's maybe a new way

01:20:14.360 | you might wanna be thinking about how you spend and save,

01:20:17.200 | episode 91 with Bill Perkins literally changed my life.

01:20:20.480 | It's the only episode I've done

01:20:21.560 | where I think I've listened to it five or six times.

01:20:23.560 | - Nice, okay.

01:20:24.600 | Yeah, I'm gonna go listen to that.

Secret Contingencies, Tax Advantages, Agent Strategies & All You Need To Know About Buying A Home

Chapters