On this episode, Ransom talks through the questions he gets most when people want to buy a house.
Learn the suggestions or answers to questions like:
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Welcome to the Social Chameleon Show where it's our goal to help you learn, grow, and transform into the person you want to become. Today we're talking about how to buy a home, frequently asked questions about buying a house. Before we we get started, This isn't meant to be legal, Real estate or investment advice is intended for information and educational purposes only. Please seek a professional in your area.
Yeah. Always to put those disclaimers out there.
People do dumb shit and they blame it on other people.
Yeah. You know what it said last year or so, we just take credit for it.
I just own my shit dumb shit. I saw it on tv that it's a good idea. Probably wasn't,
but I still did it . But anyway, so it just Kinda, I guess getting to the whole thing. I mean, yes. I am a licensed real estate professional in Hawaii.
Um, again, we're not here to endorse stuff. We're not here to sell my services or anything like that. If you do have questions about anything, please leave a comment. Um, I may not know everything there is to know about real estate in every single area, um, especially in the continental of the US or outside of the US in general. Um, but real estate in general is a slow moving asset class. Um, it does take some time and preparation before you can actually close on a deal, um, but as far as getting, you know, the wheels turning and all that kind of stuff, um, you know, just know that from the time that you actually get an offer accepted to the time that you actually own the home on average about 45 days. So that being said, just kinda known that hey, just keep that in mind and moving forward.
So I guess question number one, whatever the case might be,
how do you start to buy a home? What does that look like?
Where we do get started?
How did it get started?
I guess, I mean that's a long like thought out technical answer I guess. Isn't that kind of mean? Yeah. But in here, I don't know.
I mean, when I was thinking about this, I was like, oh, all these things. I'm like through my head. Like I actually my credit, I was my debt, like what is this? And you're like, listen, slow down. But
yeah, I mean, I mean I guess we were joking about it the other day. It's like it's Kinda like having a kid,
You're never, you're never really fully prepared to have a kid last year, no matter how many books you read or whatever, you know, no matter how many times you practice like... Just joking.
Anyway, I'm practicing having a kid and having a kid, just completely different. But I mean until you actually hit the ground running with this stuff and I'm, it's not gonna come to you. My short answer is for sure get a team. In school they teach us teams are bad, are really good
collaboration Is your friend
find somebody who has either bought a house before and or is at least helped people buy a house before Aka realtor? Or does it have to be that I can be a real estate person that you know, any, anyone that has been through that process before you, will, you most people kind of need financing as well. So you know, have somebody that's gone through the process before, have somebody that either has access to money or it's going to lend you money and then go online. It's as easy as that. It was just basically we all got these.
Nowadays, this is kind of old school I touch here, but we all got these little smart things. Just turn it on and start looking. Um, some of the cognitive thing I'm thinking we're going to put some up in the show notes or whatever, but I'll put all the mls and all those things from there. Zillow is a really good one that would use even though realtors don't like that. No, they do have information out there. Another one. Heck, you can even go look in the Sunday paper. You don't have access to go look into Sunday paper or um, they got tons of this. Tons of houses that are out there getting started. It doesn't really require much, you can get started, but again, like I mentioned the beginning, just understand from the time you actually start putting offers out there and from the time that you actually own the house, it may take some time, but that's where you're going to have a team of people that say, hey look, this is kinda what I like, this is Kinda what I want. And you know, then you know that your team can be like, okay, this is what you need to do Xyz to ABC, Blah, blah, blah, blah. He's a daisy.
No, I think I learned a, you were talking about, um, those other. I don't know why, I guess I'm going to call an unofficial sites like zillow. And I said, you're saying that these listings can be a bit outdated or the house could be already bought her an escrow. Like the update time is a little, a little slow to go to the kind of closer to the source a little.
It just depends on the website. They are somewhat lagging in the event that, you know, sometimes you know, people who are, who will, like the translation gets lost in the coding because new information comes directly from the multiple mls, stands for multiple listing service in your area and then it's disseminated to these websites. Um, however, you know, these are secondary sites that are not the original source of the inflammation. So this kind of know, like if you see something that says, it may just mean active continue to show kind of thing where they have an offer or the property is actually in escrow. Um, but they're still looking for offers to come through. So, you know, again, I'm trying my best not to prompt realtor, realtor, realtor, but the mls service is made up of realtors and realtors, associates or whatever the case might be. Professionals who know we have timeframes that we need to update this information and handle this information in a timely manner so that it's accurate when it gets to you. And that's kind of, you know, how we can price things at home. We can look at things because the information is accurate. Secondary sites may not be accurate, but again, at least you will get a picture of what things are out there.
Yeah. Then I went on after we had this conversation, I went on the mls.com and it's not the prettiest sight, but it's used. It's easy to look at stuff I taught type in my zip code and I had that problem when I was looking for a house a couple of years ago and we were on these popular sites or whatever popped up on Google and I'll call my rhythm, hey, I want to see this picture. It was like, yeah, that's sold already and it's like it just says four days ago should I guess sold already like a firsthand experience, that problem of looking at these sites and nothing being available.
Again, that's kind of where, you know, you go out there and get your team, you know, and then from there it's just Kinda, I guess leading into the next question, right? For finding either a good realtor or in this case you know, other team member, you know, you basically want to get people who don't know. For me, I find that it's a lot about personality, personality types, like if you're this alpha dog like that at all, I've always got to be. I've got ahold of the best house on the block and always got to be like, I don't actually know what I'm talking about.
Yeah, I got it. Yeah, I've been there, done that. I always got to be right. Last word, you know, I'm trying to get.
Just keep that in mind if that's your personality and if that's who you are as a person. Like you need somebody that can communicate your wants and needs or your opinions to the other side. So if your this Alpha dog personality and like your realtor is this really shy and you know, kinda quiet person, like don't get me wrong, opposites attract and they work in this situation, but is that person really able going to be able to communicate how you want the transaction to be done? Like kind of got to think about that. Um, and this basically the other thing too is the strategy. Like we're talking about like what kind of, you know, how are you looking to do this, what, you know, find someone who has either done what you're trying to accomplish or is, you know, can at least help you and give you examples of, I don't know where to get started, but this is what I was thinking, you know, that person should be able to tell you, okay, well with what I see here are a few different strategy options or you know, that kind of thing.
So don't discount these people's experiences, you know, mentor, whatever professional they've got the experience and they've got the things that you don't matter what you think, you know, take what they have to say and think about it for a sec.
I mean that's the other thing too, is like I walk into situations and I started giving my advice as a realtor and then, you know, the owner of the home will start telling me, well, you know, the house should be able to sell for this and should be able to do that and it should be able to do this. And I'm like, no, maybe we're not a good match here. Maybe I'm not the best person for you because I'm the professional. I'm telling you what my advice is and you're not listening to it. Like I need somebody that is willing to listen and, you know, be in alignment with what it is you want. You know, I try my best to be in alignment with as many people as possible. Believe me, I'm a very flexible person. However, when I come across somebody who we don't Mesh well, like know what I'm trying to explain in what I'm putting down, they're not picking up what I'm trying to say, you know? Then as no offense, that's just, you know, maybe I can refer you to my other friend and now what he or she is a great realtor. I can take care of you. But I don't think we're a match. I mean you kind of had a similar thing too in Fort Right? Right. What do you call that? Pass off or something like that.
Yeah, right, right. When you know, when I worked at the dealership stuff, you know sometimes like you're saying that you just don't Mesh well, the personality clashes or two Alphas or something like that get together and it's no shame to, to pass the, the, you know, the customer, often a client off to somebody more suited to help.
That's it. You want to find somebody who's suited to your needs. So you know, in a tasting you're talking about a two is I don't be afraid to fire people. You know, if you're with Auntie, uncles, cousins, Bob's nephews, roommate, like other relationship, that person, you know, you feel the obligation there or maybe you started this down, this track with this person, but ultimately this is something that you want, you gotta work towards it. Like if this person is not going to work towards it with you, then hey, sit down and have that conversation. And at least maybe if some of you are listening to this and you're in that situation, that person can always take a referral, right? They can say, okay, you know, I found x, Y, Z realtor, blah blah blah. And like we're not meshing well and be like, yeah, right here, let me pass it on to somebody else. And that original person may get a referral fee, right? Not everything that they were going to get. Have they helped you, but they can still get something out of it and then they can free up their. They're not going to waste your time, you're not going to waste their time and you're going to all have this one with the transactional. So I dunno. Become depends.
Yeah, no, I, I, I, and I agree with that. Like I, I, I see a lot of that in not just this space, but a lot of spaces like, well we've got this relationship with my friend or whatever. It's like, that's great. And all you can be amicable and say, listen, this isn't working out for me. I've got to go somewhere else. It's going to be better for you in the long run. You're gonna have less frustration. And on and on and on, bring to that 12 rules man. Like, no, I don't want to buy your toaster frankly, don't come back here. But that's the thing. Even I was reading a book, uh, the other week about lying and it's like, this is the thing, we create these small things while I'm trying to be nice and polite and, and in down the road it makes things 10 times worse.
It just saying you don't have to be an asshole, you know, I've learned that the hard way, but you know, it's like, listen, we're not working well, like my vision, your vision, like this just isn't working and I despise your phone calls. I despise your Texas. You know, mean may not say that, but just that message. Like, listen, Hey, you're a great person. Just not for me. You know, can you, can you bounce me somewhere else or something. Don't be afraid to say that stuff. Don't be afraid to be honest. You don't have to be a dick. But just be honest with people. I'm like, listen, hey you, you look in and address and I'm sorry. It's not the dress. It's your fat first people's feelings, but at the same time you've got to get that across. And they listened.
I'm thinking more of the, uh, the Wayne Dyer approach, you know, it's just like, oh, I'm going to agree to disagree and peacefully wish you to be on your way and feel good about this and I'm going to move on and I'm going to let go. Like use ransoms tack my, I'm a little bit. You're just fat, Bro. It's this thought that just fat.
Does this dress make me look fat? No, fat makes you look fat
clouded out. But you know, again, there are ways to do it, you know, just just kind of understand that, you know, once you start feeling obligated to somebody, once you start feeling like, you know, this is something, you know, that kind of takes away from the whole process now. Now it's about keeping this relationship there versus getting what you actually want and you don't it to happen.
And I guess in my mind I get probably being the questioner, the biggest thing I want to know is what do I need? What I want to be prepared. I want to have everything I need data. What do I need? Like walking into the loan officer, the realist, they're like, what do I, what should I be prepared with? What should have happened? Gathered
generally when you're, when you're meeting the realtor, you basically want to show your best personality and, and get out there, kind of have some idea and some strategy what you want. I guess we can talk about that later, but you know, be able to open up and tell them what's, what's gonna go on. And ultimately you will need to get some type of financing or maybe you have cash, but you know, either way you've got cash on less things. If you do require some type of fancy financing, then you're going to get the typical stuff, right your last two years of w two's or I nines or whatever you get your pay stubs or some kind of Id, you know, generally they kind of want to see the paper trail of your assets will let me be, um, if you are going to say that, you know, hey, I'm going to put $300,000 down.
You know, uh, people want to see some type of paper trail, like a, let's see a bank statement that says that shows that this money has been in your bank account for over six months. You know what I mean? That kind of thing. Or usually if you have that kind of money, you have a personal banker in that personal banker can write like the little sign letter. Um, if you're going to get gifts from people you know, you, you, there's a, there's a gift letter that you can get those kinds of things. Um, some of the other things, I guess this kind of came about and the days when we had the Ninja loans, people had no job, no income. They just melt down around 2008 we had, it was just the market correction. It wasn't a metadata.
All kind of shit was melted around me, took advantage of it. It was fun to make a lot of money there in that time, the market correction. But, um, after that time, nowadays what they do, if you have a job that has variable income, let's just say I was a realtor for a, I don't know how many old I feel old now and I spent a decade, but whatever, 12 years I've been in the business, um, you know, you kind of make different, like one year old, you'll make a lot of money, other money, the other year you won't make as much, so they kind of take your tax returns and they kind of average out the money that you made in those two years in the sense you get a streamline baseline of as to what you can afford. And then for those of you that are going to get out there and get business loans, I don't know what your strategies are, but if you're a big corporation or say like an escort or something like that and you want to get out, you know, just just have the paperwork from your business. Um, and that's what it is. And then for those of you that want to get started, I mean the Internet just open up your smartphone and start looking. It doesn't take much to do that. Anybody can do that.
I keep seeing commercials for like, I mean apps and stuff. You just enter a few things and import your bank stuff and boom, they give you like a baseline for a loan and stuff. It's like really getting really streamlined and simple or nowadays have a home. You just want to refinance and take some money out. You know, got like those rocket mortgages. All that stuff is amazing nowadays with the Internet and cell phones and how fast everything moves really crazy. Okay. What, uh, what about, like you were saying earlier, like learning, learning your wants versus your needs in a home and this is not what you need to buy a home. That basically what you want in a home and a home or what you need in a home. I guess this takes me back to my early days back when I was a young little bit understand whatever.
Um, but I went to this class and this guy was like, okay, so you're trying to help a buyer purchase a property and now as a realtor, right, you need to figure out this person's wants or this person's needs. And then he brought up that conversation and he's like, so what happens if the buyer tells you that they need a pool in their backyard, you know? And then like every buddy like raises their hand and like that's not a neat, gets a lot. That's a lot. And he's like, well, I didn't tell you the whole story yet. Like what if we told you that their son has muscular dystrophy and the only physical therapy that their son can get in a pool? Like, ah, like the light turns on. It's like, yeah, that's not a want anymore. That's a need. That's how you get fired as their realtor.
Exactly. And if that's the situation, it's like, you know, they're not listening to you that you need this pool and they're showing you homes that don't have a pool. Like, you know, that's when you got to get real and either have that conversation with that person or just be like, hey look, it was nice, but I think when somebody else, but it's kind of hard and this kind of takes a little soul searching to figure out because most people, you know, their, their want lists or should I say they're needless maybe like these are my house in the hills. Like to have a separate dining room area. I need to have like, like, you know, a helicopter pad. I mean it's mandatory just like gonna put that right next to the pony ranch. Like, you know, you've been here before. I know, you know what I mean, you just kinda gotta get through it.
Um, some of the things that people don't think about our location to work, you know what I mean? Like they think that they live in a certain area or a neighborhood when reality is like if you live closer to work, like yeah, it may cost more money if you live in town, but save so much more time in your day. Like you can actually spend more time at your house or, or the opposite. I know people that purposely live an hour from work because they want to live in the woods or whatever and they want to commute. That's true. Our, then you got people that have like the personal touch, like your school teachers and stuff. They don't necessarily want to live in the same area that they teach, you know, just for, you know, can create that barrier of people. So just, you know, sometimes things like that.
Um, number of bathrooms, like you got seven girls living in your house, you're going to need more than two bathrooms. We moved to this house grounds, like we don't need three bathrooms. I don't know how many times every single bathroom has been remembered. I always say we don't need three toilets. Not a sexist comment. I'm just saying in general it will take longer in the bathroom to get ready. Whatever. You guys usually take a lot longer to do business in there. Go to me. I do all my social media as I pooped. So I'm in there for awhile. Bathroom Craig.
But uh, yeah, whatever, um, so just that kind of stuff. Number of bedrooms, square footage is kind of a lot. Some people think they need a really big home. Just kind of look at what you live in now, what you live in now. Just kind of like get the square footage of that. And for most people that's enough. Some people want to downsize and they downsize, but that's when you're gonna need a really good team member or somebody to be completely honest with you and say, look, I'm want to downsize, but listen here, I'm not, I'm not sure you understand that that's a circle. You can't fit a square circle, you know, says he comes with an estate sale, right? Shit off because it ain't fit.
Or yeah, maybe have the garage sale first down payment, go get that garage sale done. But basically learning your needs from your warrants, like sit down and create this list of needs. At first I won't go through them and say like, is this something that I absolutely need or is this something that's just a lot? And that's what made me and my wife has been a lot of time when we were looking at a house, say alright, what are the, what are the must and what weight and what can we compromise on? And sometimes it's frustrating, you know, relatively trying to be creative. Like do you really need a pool in your neighborhood or in your house? I'm like, what? I pull up and I'm like where's the pool? I'll just neighbor doesn't have a pool. I'm like, I thought I told you this is one, like I'm not compromising on like a park in a pooled in, at least in the neighborhood. There's no compromise here. I could compromise on a day like, but you know, and it. But we had a very, a very solid lifts like
these, these will be nice to have. But these are a must, the number of bedrooms than the minimum bathrooms. The amenities like it was, you know. But we went through that and we knew, you know, like Oh, when we decided on this house, like there was a few things that weren't there. But the majority of them was there. And more more of things we liked and then were not available and it was really hard to get a house in a place with all the things on the list, but the necessities are met and that's what we had going into this whole process. We knew already as long as we meet these needs, the rest of the things we can deal with,
it's work in progress, but things that, you know, people have to hash out and have the numbers to kind of go through that with you and make that happen. And sometimes your needs become, wants you just, they kind of go backwards. Like you don't need them when you get money involved because sometimes what you need you actually can't afford. So you know, you just got to go through and see that out. But generally knowing those ahead of time are definitely good. But I always remember that story. It's like, Oh yeah, that pool, that's just the one. And then like you hear about their son, that's, you know, they need this special what type of therapy? And it's like, Ooh, that's like the eyeopener that changes the game. It's like all of this becomes a real need versus something that we just wanted. Yeah.
And even that's. I think that's a cautionary tale. And in your profession in general, do you deal with people like that? You know, assessing that, you know, I, I deal with that a lot though. There are car sales is like, people come in at 3:50,
you have a house
trailer, boat. What the what? Oh No, I just want a big truck like do you need an $80,000 after he 50 to drive to and fro work. Maybe not like, you know, but you got to assess that like, you know, do you really need this or do something like to have, can you know? And then start to talk, talk, talk with them and having that kind of conversation like,
yeah, but they, you know, that that's just kind of working them. The more that you know off the beginning, the get go, like you can kind of get to it and you know, you'll work through it, but it's just a good conversation. And then the next big question I get is like how much money do I need down? Like what were the years that's kind of been known, I guess that or maybe people don't know, but sometimes you actually need zero money going in. Depends on what options you have available. And again I'm not endorsing anything but bay buyers men $1,500 total.
Like a lot of people though. But I'm just saying like that's all it costs. You can get everything signed, Blah Blah Blah. $15,000, $1,500 down. That's $1,500 bucks, close escrow and that's it. Use Your keys, pay your payments. That's a pretty good deal on some other Usta loans that are still available with zero down. It's not as cheap as va loans, you know, whatever the case might be. But then again, it goes all the way to say like, you know, if you're going to go conventional five to 10 is the average and if you're going to go with some type of investor loan or a non recourse loan, kind of just depending on what your strategy is, you're looking at it maybe 30 to 50 percent now. Right. So you know, again, kind of weigh out the needs. There are times when it has beneficial to put more money down and there are times when it's better to leverage your money and Hey Margaret deserves a all time low rates or you know what I mean? Historically low rates under five percent. Yeah. You might want to finance more of that and put your own hard earned cash to work. They're just saying
yes. Sometimes. Sometimes I look at people, I'm like, did you need to put $30,000 cash down when they are offering zero percent financing on that car? That makes no sense. Doesn't scrape out half a percent in a savings account. At least that's better than what you just did.
Well, but then again, right. This takes us back to the wants and needs. Right. Some people don't feel comfortable having no equity. No. It's like, that's originally when our parents started buying 20 percent down was the norm because banks wanted some equity in there just in case that thing went and they would get their money back. No. So some people just don't feel comfortable going all out and leveraging every single percent the can on it, but that's not your strength.
My strategy is to leverage where, where, where it makes sense. If, you know, if I'm knowing I'm getting, you know, five, eight, 10 percent return at and I can get a four percent loan on something, I'd rather keep my money and, and, and make four, five, six percent versus, you know, having to pay all of that and losing. I don't know, I like to make my money work as hard as I can. You know, if I'm gonna get a zero percent car loan, I can keep, you know, 30 grand in the bank at one percent. At least. I'm ahead at the end of the day, you know, I do understand people like to not have any debt and you'd like to, to not have these, these things. My opinion, I, I feel like it's a waste of money because that money is now gone and you can't have it work for you versus I'd rather have the money working for me. Maybe even if I put half down and it had another half working for a little bit. I don't know. That's like you're saying it's up to you and your preferences. Like to try and make my money work as hard as they can for itself.
Yeah. And this might be bleeding into the next question, but you know, there are other types of creative financing. If the sellers are using realtors to sell their home, there may be less of that going on for sale by owners or other types of things. You know, they always have creative financing, rent to own options. Um, seller financing where you can go in the deal and the seller will basically give you a loan. They don't meet all their money upfront. They just be like, okay, or we'll give you a, you know, you can own the house or whatever and we'll give you a loan for 100,000 or 50,000, whatever. You just pay us back over over six years. Like all those things are still available. You know.
The other thing, if you know of, or you've heard these things, like sometimes you know, talking to the other person and say, hey, have you heard of this? Like, I, I was a guy the other day. He was like, no, I went into this. I was trying to buy this apartment complex was I think it was like 65 million. I said, I talked to the owner, said, hey, would you be willing to finance some of them? He's like, what are you talking about? And he talked to them and in the owners like, that sounds like a great idea. I'd like to make a little extra. I don't need to do the work. And he wind up, you know, financing, you know, um, he just needed $3 million down, which you want to getting from somebody else. And he taught these guys a couple of things and he was, he was, you know, he was, I think it was only out of pocket, like 200 grand on a $65,000,000 property. Something along those lines. The, my numbers maybe a little off, but the premise is, is there, you know, sometimes if you know of these things that you've heard of them, you can start to talk to you, hey, where did this thing, do you know how to work it? Um, you know, have you heard of it? And you can really, you know, not only enlighten other people, but maybe you can save yourself some money or whatever. Now.
I mean it's just always, you know, you never know what one thing is going to lead to another one. You know, this is not, maybe not getting off what we're talking about the Sunday about the Victoria secret owner, right? Like business or whatever. Like he sold it for like four Mil and the guy that bought it after that, it turned into like the whole sex appeal of thing that we know of Victoria's secrets now for the 4 million just turned the light $50, right.
You know, they got a lot of times people don't see the vision or the creative solution or whatever it is and you need to get it. And that's the good thing. Like we've talked about in the meeting this getting a team, getting creative collaborating because everybody's got different ideas, experiences. Sometimes you get a few people together and started talking and next thing you know you're like, oh crap, we just discovered or we, we've, we've worked out that maybe one of you on his own never would have thought of. And then I think that leads us into, you know, having, you know, an entry or an exit strategy. Like what is the point of buying this house, you know, like why are you buying this, this, this, you know, the only thing I can get, like I want to just grab something, is this forever home? Like what are you doing going into the.
I guess for me, I've always been of the business mindset, so whenever I think about this question I automatically think numbers. I think, okay, how much am I going to make? How much kind of rented out for, but you know, the average Joe and most people like if you ask them what their exit strategy is like, it's like I don't have an exit strategy, I'm going to buy this house and I'm living it for my entire life. I'm going to raise my kids here and when I thought I'm going to give it to my kids, like if that's your strategy, like you already have various strategies, you don't need to make money off this house, you didn't do anything with this house, right. Own it and live in it and enjoy it and that's your right to do so with your children. Like done, done, set a match. Like you don't need to think about it or get too far into it. I mean we talk a lot of business on the show but you know, this is just for the average person. Would you know? I Dunno,
that's perfect. That's what we were chatting a lot. It's like these are the things that that's okay. That's your strategy. Just know that going into this, you know, maybe it's waiting a little bit more, you know, to, to find something you are absolutely in love with it. You want to live in for 50 years versus things are hot right now or marcus down. You know what I mean? Like thinking about these things a little bit in events, you know, I just want to buy something now and then I'm going to move and then buy something else in their. Rent that out, like thinking about all these things. Just even if you're just a little bit, you know, you can really set yourself up I think in, in my toe to win the long game, you know, having these things in place, knowing what you're going to do. Maybe buy something a little little shitty because they can listen. I'm handy. I Ali doing carpentry, you know, I'm going to fix this up over the years with my family and my kids. Who knows.
Yeah. And you know, that takes us back to the, you know, the whole, the whole thing of, of why people do it. Most people do it just to raise a family. But then again, I was telling you about that other strategy is that, you know, I, I call it a loophole, it's not basically the whole, but it is basically if you live in your house for two out of five years and that's 365 times two plus one day.
So 731 for everybody at home listening.
You're doing math now. When did this happen? I use the Cochlea. I wrote it down in events. I cheated, I cheated. But uh, you know, in that strategy is you can sell your house. Do you want a 50 per person? Married couples? 500, like 250,000. Like that's, that's decent sum of money for two years. That's 125,000 a year.
And what you're trying to say is that that will be tax free. Is that what you're saying?
Yup. No tax,
no taxes. So live in the house, verse 731 days minimum.
Whatever appreciation in the house is is yours tax rate. I'm not saying you're gonna make 200 and those two years. I'm just saying you could make up to that amount. This is more of an advanced strategy. It's like I'm going to buy this house now again, this is where time is on your side. While the young people out there, I urge you to get out there and get into something. Even if it's nothing. Yeah, you're going to buy it. You're gonna get a loan for it, but eventually 30, 30 years later, right. When you're of retirement age, I think at least for us anyway, right? Thirty years will be at retirement age. Let's just say we bought a house now and then from there and another two years for say we buy another house and then in two years after that we buy another house with this.
I do buy a house two years, buy a house and still live in your same original house, but buying other houses or whatever, whatever you live in that house for whatever. It's just whatever, which way you want to go. Well, let's just say we did this three times. I know what an example. We use five, but let's just say we bought three houses. Now we're getting close to our retirement years. Thirty years is up, right? That whoever was renting that out or that investment property, they paid the mortgage off. It's worth what we originally bought, of course worth more than what we bought it for. Right? And let's just say that the houses we bought are all $250,000 30 years later. Now we go back and we live in for two years. Then we sell them and guess what? After we sell the first one, what are we going to do?
We're going to move to the next house with 250 k in the bank? Yeah. Live in it for two years. There were going to sell that house and then what are we going to do live in their next house for two years. Then you see how the pattern. I like this. You're older, right? Like that's a $125,000 a year in retirement. On the side, yeah. Yeah. So like that's kind of like, and this is where the whole [inaudible] hey, hey, hey, I, you know, don't get me wrong, you're going to incur some holding costs and those properties are we going to have to pay some loans? You have to pay some interest. You're gonna pay property managers along the way, just saying in the later years at the end, you know, they'll think ahead. Again, this is an advanced exit strategy. If your strategy is that you want to live in it and give it to your kids, no problem.
That's a great strategy. So strategy, you want to live in the home and use that equity in your home to fund their college or to do stuff like those are all perfect strategies. You can live in your home and in your elderly years instead of moving and selling, you just do a reverse mortgage. Like these are all exit strategies that are, you know, make real estate. Such a very volatile asset is like you can do what you want with it. You know, it's like maybe not the right word, but maybe it's A. Yeah, it's a versatile or diversified asset and the fact that you don't have to just sell it, you can finance it, you can improve the property, you can do all kinds of things. That real estate, which is why I got into it in the beginning, but anyway, this more advanced, again, if you're going to do that type of strategy, have a team of professionals, get some lawyers, you know, figure out how that's going to work for you. But ultimately, you know, that's a strategy just saying I like that.
So you're saying is I need to buy up houses all around the 40 niners stadium. I'm not saying anything they want. If that's what you hearing what I'm hearing you saying anything I need to buy houses within 30 minutes of the 49. Steven, Ken, and I'm just going to move the house to house can still go to games. That's what I'm hearing. You heard the diversity part of that? Like all around you, you hear of the stadium that's around. There's lots of cities around the stadium. If that's what you hear in, man, this is what I hear. I mean, I hear houses near and around the 49 [inaudible] stadium.
I like this. This is my retirement now, all around, all around the United States. Hopefully they don't build another one. Damn, that sucked. And then from there, I guess speaking of the advanced strategy, we have the fixer upper. Oh, that's Kinda like the frequency, you know, the frequently asked question is like, oh no, I want to get a fixer upper. And it's stayed up late watching them. The guy's name names like I can show you how to be rich selling real estate that it just read my book. Right, right, right. It's like, ah, man, there, there are so many shows on tv to just kinda either romanticize this idea or, or get it up. Don't, don't get me wrong. Um, it's, it's definitely doable. People on TV doing it. Um, however, you know, you just kind of understand that they have a lot of professionals. They have a very big and sophisticated team.
These guys have like money making machines, businesses that just can spot these deals and getting them done. Record a bowl. Um, you know, it's not for the, in my opinion, it's not for the first time person if you like to step up to a challenge, you know, I've known some people out there as a first time home, they're going to both do the fixer upper or buying raw land and just develop it like hey, by all means that's a. But at the learning curve on that, in my opinion is pretty steep. Like no, you see them on the shows all the time when they have like, oh, you know, like we have this pipe going through and like that wasn't in our original budget and now we got, you know, it's going to cost us instead of us back. Like, just be careful, you know, fixer uppers look like great deals because they are undervalued but they are undervalued for a reason. And because you know, just one false turn or one, our foundations group, the extra five grand like
mold, festus, who knows,
you're like, oh shit. Just be careful with those kinds of things. I'm not here to stray you away from it. If that's your thing and that's what you want to get into, go get it.
No, yeah. He's a great opportunity, but like we were talking about earlier, I'm prepping for this. When I was in construction, the main thing I used to see a lot of is people did not have money or, or didn't have the foresight to set ahead like there's going to be overcharged. There's gonna be unforeseen things. If you don't use that extra 10, 20 percent good, but you've got to plan for that. Things take longer than they do. Like no, no, no. These things going in and then when, when these, especially when you're first time like no, contractors are going to be late and there's going to be overages and there's going to be. All of these things is going to take longer. Like no, all these things going in so that when they do happen you're like, this is my first time. I don't really know these people. I'm working on my team, you know? Yeah. I heard about, you know, like be prepared for those, you know, first time bumps and bruises and not just going to us. Going to be easy, we're just going to snap some new paint on and throw some kitchen cabinets from lowe's and good to go. If that happens, hey, be prepared for the next one. It's not gonna be so easy, but understand what's happening.
This always takes us. It takes me back anyway to rich Dad, poor dad, fail early and responsively, man. Get that fear out the way. It's just like be prepared. Like if this first time going in on this, like be okay with, hey, if this doesn't work out. Yeah, dot what I'm saying?
Yeah. I know of a few people personally where they're like, yeah, we're, we're gonna renovate this place. It was great and the terror thing out and it's like, okay, oh shit. That was a lot more work than I thought like and then and then you know, some people have have kind of lost a little bit on it. Some people just didn't make as much as they thought because they had to let it go because it was just too much work. Like these things are happening. Unfortunately, they don't show these the shows and I don't want us to, I don't, I don't, I'm, I don't want to discourage people though, a little bit like God get into these things if it's something you you want to do and you want to try but understand the unforeseen things, the unknown unknowns there, there and be mentally prepared and be financially prepared. You know, when I did, when I worked in the construction industry, we used to set aside, you know, 15 to 20 percent for overages guaranteed knowing they were going to happen. So that's something you may want to think about.
Yeah. And, and again, uh, you know, I'm just saying first time home buyer, maybe this is a little bit maybe above your pay grade in that case, make sure you have a good team, making sure finding individuals that have, again, the strategy you're looking for, make sure they've done it before, make sure they can kind of help oversee some of the things that are going to happen and that they can help you with that. And if this is you trying to take it all on by yourself, like you know, just have the right attitude. You did. Don't, you know, just remember pigs get slaughtered, money of pigs get slaughtered and hogs get slaughtered. No, in your asset has become a liability and owning money and know when to get out. Yes,
there's no shame in and cutting your losses. No learning lesson. Maybe you can get a tax credit. I'm not a professional, but that could be something you could use to offset some of that, you know, talk with other people
as long as you're prepared for that, I think that's good. And again, don't be fooled by the easy win man. You get that first fix wrapper. It turns out great for you. Tons of money. Again, that's an easy win. Let's celebrate and went on the next one. That's again, be prepared for something bad to happen. Yeah, no, it's all, it's all fun and games until somebody who's money.
Absolutely. But yeah, don't be discouraged by this conversation here. Be prepared. If that's something you're looking to do. Another thing, maybe if you're a carpenter, handy type you, you want to do it yourself, like understand that late, I'm going to, we're going to live here, we're going to tear out the kitchen is going to be a few months, we're going to have to eat a lot of deliveries and uber eats and whatever you know, and then that's going to be nice and then the bathrooms are going to turn out like, but understand that initially your family understands that you understand the project you're taking on maybe the type of fixture up or you need to start or something along that lines it. My neighbor did that. They live here and you know, they slowly renovated the house and just got finished selling it. That's the thing. And then, you know, the. The last question I used to get us a lot in the car business, and I, I'm sure you get this a lot in real estate, is how much should I underbid?
I always, I'm a homework kind of guy. As an upholder as I am, I definitely do use. There's a lot of data. Again, it all starts with this tiny little device you have in your hand. If you are serious about buying a house and you want to get started, start looking, look in the neighborhoods that you want. Look for the things that you want. Hopefully you can identify what you actually need over what you want, and then we see the same thing pop up. Yes. What's going to be attached to anything, a number, right? You're going to see this number pop up and you're going to see certain numbers pop up again and again and again. If you have a good team with this all on a spreadsheet or all on the cma or whatever it's going to be, and they can show you what the numbers are.
If you look at your numbers right, you're going to see this thing called the need. For those of you that don't know what it mean and median the mean is you take the average, take all of them at. I'm up by them by how many there are and we'll get you your meeting and from there you get the median. The median is the one right in the middle. Okay. Those two numbers is right around where you should at least be thinking about purchasing a property. From there, you will have the one that didn't sell out here and it's still on the market. I'm sorry, we up here. It's still on the market and it's active and it has a soul yet, don't, don't, don't, don't look at that price and then the one that sold for the least amount of money. No, look at that price either, right? Take the mean and the median and some are just underneath it is probably where you want to be smart about cutting it and if you've done your homework, you should know what that number is
and correct me if I'm wrong, you're really terse. Should know the area and the value and say, this house is priced well. This house isn't priced well, this house is underpriced. We should actually be overbidding. Your religious should be able to help you with that.
Again, I'm not trying to plug for realtors, but generally that's woo hoo we're working with. Right? Well, just keep in mind that realtors, you know, I've been around, we adhere to the code of ethics, so it's somebody that's not, you know, that shouldn't be steering you wrong ethically get me wrong. I've met a lot of unethical realtors in my day. I'm not sure how their business then still practicing, but yes, generally speaking, realtors should be able to get comparable homes that have sold either area or if it's a unique custom home, they should be able to find ohms that are not exactly like it, but they should be oranges to those apples, at least fruits.
From there, you should be able to get a number, but again, and use the mean, use the median prices and lightly go from there. If you see a home that is priced low unpurposeful, you know that it sells for x, Y, Z and it's priced already. Don't be the guy to underbid that house like I just cannot tell you how many times I've advised my buyer to be. Look, this house is under it. Like you're saying, like it's under priced. We don't need to underbid this home. The seller already included that underbid in their asking price. This is the one that you actually bid overall, real to tells you that. Don't be afraid to listen to that. Right, because there are many times when that is real, but you know, main thing is that real estate is not always about numbers. About how many people.
I can't tell you how many people get into real estate thinking it's about real estate. There was nothing to do with property. It is all about the people that you don't know why they're getting out. You don't know what their situation is. They don't know what your situation is and why you want to buy it, but somewhere you guys got to meet middle. I've had sellers pick lower priced offers for. I can tell you how many different reasons like it is amazing. Like this offer is higher. You don't want this offer. No much more. This one, it's like we liked their cute little dog, like whatever. Like I dunno, I dunno what thing is, but it's just whatever the thing is like you, you don't always know what that is.
Yeah. I know. One of my favorite stories about that is this, there's this plot of land, I don't know, I don't know where, somewhere in America and there's a guy that owned it for 20 or 30 years or something like that and they wanted to build a strip mall there and everybody kept coming ahead, you know, architectural designs drawn up and they brought. The guy showed him, look, this is what we're going to make me beautiful. He's not selling. So then they bumped the offer to pay you a million. It's only worth seven fifties, I don't want to sell it. And then, and then those guys got kind of bogged down and another group came in and we're going to do this and look, we're going do it. I make this big thing. It's would be great. Like we'll give you two minutes. He's like, I don't want to sell. So finally one guy came in and say, Hey, like, why? You know, what do you, what's your plans for his property? He's like, I want to sell it. And he's like, but you could kidding, like millions over your, your, you know what it's worth. He's like, I know, it's like, so what? What is it going to take to get you to sell his property? He's like, well, I bought this 30 years ago for my family to leave a legacy. It was like, I just want the shopping mall named after me. Yeah.
But nobody had ever asked him why he wants this. Why, you know, what would it take to, to satisfy, what do you want of this? He didn't want the money.
He just wanted the shop. You want to be named after him. Like I say, I absolutely guarantee you put in the contract and then they bought it for, for what it was worth and them all. To this day, I don't remember what it's called is named after this guy and not every time his grandkids drove drive by, you know, they're like, that's GRANDPA's legacy to us. That's cool. Yeah, and that's the thing that a lot of people don't understand. They think it's just about numbers or I want to underbid so I can get a good deal. It's like you kinda gotta know and believe me, if, if the seller has a good real estate agent, you're not going to know what the motives are, um, you know, but if you can find out what the motives are behind it, that's going to get you the best deal that you can possibly get.
And then for those of you out there, I know you're out there, you're probably listening. I'll take it personally, I just, I've had to deal with in the past, may not be talking to you personally, but somebody who's just like you where it's all about the numbers game and never feel satisfied unless they absolutely have to get a discount and just dealt with you before. I don't understand what it is, a mountain ena, but um, you know, don't take it personal. I try my best to not take it personal. But if you're one of those people, you always got to underbid. You always got to get that deal. You never satisfied unless you get that deal. Like just be mindful that the person you're submitting this offer to as a job and a duty and obligation to submit your offer to the seller. Like don't, don't put in a unrealistic low ball offer link the whole of Lake Twenty page contract.
Just if you're going to do that, just do the first two pages that has, who's buying it and the price and just keep it to that and just send that out and just be like, hey, this is a blanket offer I'm offering. Um, if you're interested, I will send you the full offer and just leave it at that. If they are going to take it, they will respond back to you or they'll counter you. But most of the time if they're, if they know what the home is worth, that offers just gonna just gonna look at it and be like, no, I'm not even interested. So just send the first two pages. So usually the best way to get that out and it saves the most time for you because you're writing the offer and it saves the most time for the person that's reviewing it. Um, I dunno, anything you got to say on that because like so many times, I mean, I don't know how many times, like in the different various sales businesses, like here's what we paid for it from the manufacturer. I can't give it to you less than I bought it for. And they're like, yeah,
I've another hundred dollars,
I would love to. I just can't. I bought it for $10,000, I'm giving it to you for 10,000, nothing's happening here. I'm losing alligator here actually here. And they're like, yeah, I know what you're saying, but, and, and, and, and they're never happy and that's just that type of person to understand that just never be happy this, it's not cheap enough. And I know and I've actually sold things the opposite way, full full price, like in fact too high sometimes, you know, you know, because in some business I've, I've, I've worked in it like let's start this up high because we're going to come down anyway. And it's like, oh yeah, that works. Yeah. Excuse me. No, yeah, that's perfect. That's what I was thinking, okay, let's sign this before you realize what the fuck's going on here.
You know, we generally go shoot. No, that's fine. Yes. Just I know it's all about perspective. You know, getting a good deal is up to you. You feel like you've got a good deal and you pay full price. That's great. If you feel like you got a good deal and you paid costs, then that's, that's all on you. It's really, it's all about perspective. If you're working with people that don't be mad, you're not kind of person. I get it man. I like, Hey, I going to save money to one of the biggest jeans I know, but hey, you know, according to my DNA, I'm not Jewish. I would have thought I was like, I would've put money down.
Something's wrong. Tinies nothing. There's markers on there. I think they switched my DNA at the lab. I like to get a good deal like the next guy and then sometimes you know, I'll pay full price knowing like I could had a little bit. Now like what you're doing here, I'm going to, I'm going to put a little money in your pocket. I feel like I'm getting a good deal. Well that's all right. Yup. Over time. But anything else that we think people should absolutely know, you know, starting this home buying process. No, I think that's a good start or stuff like that. If you guys have any questions or whatever, regular social media you email us or whatever. Yeah. Um, especially with. Most of these will have to answer these or I'll consult with ransom on my answer before. Um, but also if you know, if some aspect of this isn't attainable to you right now, like you go out and you're like, oh yeah, hey, listen to your customer that we have.
We have an episode. We talked about credit and about money and different things. They may need to go back and check those out. It depends on the situation, but we do have a few other episodes in this to help you guys. If there's one of these sticking points you need to go after a fix or whatever there is. You're looking for an investment side. We did a few episodes on different ideas on that stuff. Go check those out. I'll try and link to as many of those as I can think of, but other than that, a giveaway. If you haven't saw the episode we did for the movie review, I'd say go back and look at that generation freedom. Forty two, a one right before this, uhw, , w we absolutely loved the movie and the message and the premise and um, I like to give away five people the opportunity to watch that movie and get those resources that they have there.
So we're giving away five copies, access to, to the movie. It's up on their site, a gen freedom.com. And you're looking at it, go back and listen to the episode before all month, February. We're looking at, given you know, five people that opportunity to start that microbusiness. I love that word or that side hustle or giving yourself permission to do something. Whatever it is, go back and watch episode, not head over to Jennifer in that. Come check out what they got going on. We're given five people a copy of this movie. Nobody's paying us. We're paying for this. Nothing to do with them at all. We really enjoyed it. We want to pass it on to you guys. What we always do, we find great things. We want to give them away, head over to social media that show slash pick me, get entered into the giveaway and hopefully you get a chance to win a copy. If not, I definitely recommend picking up and buying it. And like I said, we'll. Is there any fundamental books we should recommend? The people.
There's a few hours off the top of my head though. If we've come up with something, I'll put that in the show notes for you guys. Um, I can only think of real estate investment type things I, but there's information out there on websites and stuff. Uh, and then we'll put the links to all the, the common, um, I want, I want to call it third party real estate kind of sites that the zillows and the trillions of that as well as the authority sites that really took that comment and that's not common. So that will put all those links for you guys to use, easily access those. And then this week's challenge. I challenge you folks, this is something you're looking at. Get out there, go looking. Go see a professional, whether, whether it's a, it's a, it's a mortgage broker or whether it's a realtor or whether it's some top of somebody in that capacity and find out where you're at, what you got to do.
Start Looking, start doing this stuff. Start getting the experience. Start doing these things like everything in life you've got to start doing. We can all sit around and watch 8,000 youtube videos that don't mean shit. Measure out there doing so start doing. And if it's not the right time for whatever reason for you, you got to do this or that. It's okay. You know, now you're not sitting around your house. Well you know we should buy a house, but oh boy, I don't know what our credit all but I don't know about you. Have enough down. Go see a professional. Go, go see these people. Start doing, go now.
Have you gone yet? Just check it. You know, final thoughts is, you know, where there's a will, there's a way if you are really looking at buying houses, something you really want to do, just get out there and start going and to pick up the pieces. So don't worry about, oh my credit's not perfect, I don't make enough money at the jump, like go see what it is you want to do and just keep, keep the end in mind. And as the pieces come, you'll start to put the puzzle together. You know, just just kind of as you head out there, just believe that things will, you know, things happen for a reason, right? They happen for you, you don't happen to you, they happen for you. And they will come together. It will definitely come together. You don't need all of your, you don't need all of your, your chickens in one egg, you know, the, they'll, they'll get in there and they'll start becoming what they want to become. You know, the main thing is just keep moving forward, is it.
And if you know some people that need help, putting the puzzle together, share this with them, help them get going, you know, or you know, or you know, giving us some likes and reviews and stuff and it's going to help us, this show in this episode it reach more people that are looking to stop. That's the absolute best way to support the show, you know, and in and in between episodes. You guys didn't check us out on social media, social media. Ask Your questions, see what we're up to, facebook, instagram, twitter. If you want it to have a more personal conversation with them about this topic on email us and we'll, you know, I should have some or I'll get an approved answer. I'm also subscribe on Youtube your favorite podcast app for past episodes and links. Everything we talked about here today. Make sure you head over to the social human that show. And until next time, keep learning, growing and transforming Cybersyn you.