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Oct. 23, 2023 - Fresh & Fit

02:08:12

How To Buy Your 1st Rental Property w/ Bigger Pockets Step By Step (Novice to Advanced)

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	Thank you.
	What's up, guys?
	Welcome to Fresh Air Podcast, man.
	We're here with David Green from BiggerPockets.
	We're going to talk about how to get into real estate step-by-step from zero to 100.
	Let's get into it, guys.
	guys.
	Let's go.
	And we are back.
	What's up, guys?
	Welcome to the Freshly Podcast, man.
	It is a special day.
	It's Money Monday.
	We are here with a good friend, David Green, over at BiggerPockets.
	We brought in the big guns for this one, guys.
	Quick announcement before we get into the show, though.
	Two or three main things.
	Rumble.com slash Freshly Fit.
	As you guys know, that is home base for free speech.
	If anything ever happens to us and we get canceled, y'all know exactly where to find us.
	But I will say this.
	We are out of YouTube jail slash death row because we're definitely on YouTube death row for a bit, man.
	So...
	If you guys notice on the channel, if you go to any of our old videos or anything we've recorded before, if you look at the, you know, progression bar, the timestamps are there now.
	So we are pretty much, you know, good in that respect.
	So we'll see what ends up happening later on.
	But yeah, man.
	So if you guys want to go back, watch those videos, you can actually see the timestamps in there now.
	And even in this video, it'll be there.
	Also, CastleClub.tv, as you guys know, all the behind-the-scenes content is there.
	Vlogs, IRL streams, etc.
	A bunch of stuff over there, man.
	Our old Patreon videos where we give Dating 101 advice, that's still relevant to this day, by the way, is all there.
	And then, yeah, go ahead and get my book, Why Women Deserve Less.
	And then Fresh's CEO Network as well.
	Yes, we've got to meet up on the 20th of October.
	Tap in.
	But, man, screw all that.
	We've got a special guest in the house, man.
	Dave, we know who you are, man, but the audience might not know who you are.
	Can you please introduce yourself to the people?
	Yeah, I'm a former law enforcement officer, did that for about 10 years, started buying some real estate.
	The world of law enforcement changed quite a bit during that time.
	I was very lucky enough to get out.
	I kept buying rental properties, eventually started a real estate team, started a mortgage company, and now I host the BiggerPox podcast, biggest real estate podcast in the world, and I teach people how to be good with money and invest in real estate.
	Bam, bam.
	Very similar story to myself.
	You did Patrol, right?
	Yeah, I started in jails as deputy sheriff, worked a little bit of marine patrol, and then I moved out and worked with the transit police doing patrol.
	Okay, and this is out in California?
	Northern California.
	Yeah, how was that, man?
	I mean, it's not a fun place to be a cop in the Bay Area.
	You're not loved.
	There's a lot of stuff to get into, of course.
	You learn a lot very quickly in that area, but I'm glad.
	Let's just say I'm glad that I don't have to be there, and my heart goes out to all the first responders who are still doing that job.
	It's thankless.
	Yeah, it really is, especially nowadays with the, you know, anti-police culture that we got going on.
	We had Paul Alex on the show last Monday, actually.
	He was a cop, I think, out of, like, the Oakland area, out of the Bay Area.
	Yeah, the same area that I was working in.
	So, yeah.
	You weren't Bart, right?
	I was Bart.
	Oh, yeah, it was Bart.
	That's what it was, yeah.
	And that's the transit police for the train, if I'm not mistaken.
	That's exactly right.
	Yeah, but there's probably 45 stations throughout the Bay Area.
	So, if you just think about the kind of people that are taking public transit all the time.
	Oh, yeah.
	Yeah, they need police, bro.
	You're not living in Leave It to Beaverville.
	Yeah, and you guys are probably busy as hell for transit police.
	Yeah, all the time.
	That's wild, bro.
	Because normally, you know, that's a chill gig.
	Like, if you look at, like, Amtrak police, they're chilling most of the time.
	But, like, Bart?
	Nah, man.
	That's a...
	Y'all are busy as hell.
	What made you want to actually get into real estate versus staying the cop route, getting a pension, all that stuff?
	I mean, I probably would have stayed the cop route if I could have.
	I developed some plantar fasciitis that was terrible for just, frankly, working too much.
	I was working like seven days a week to be able to invest into real estate.
	And I was referring all of my friends to real estate agents to help them buy real estate.
	And then they would come back and ask me, what do I do?
	How am I supposed to handle this?
	This is what the inspection said.
	Everybody hates their agents.
	It's very hard to find a good real estate agent.
	The bar is way too low.
	So I got my license and started selling real estate as a cop and in my first year I ended up being like one of the top agents in the whole brokerage and I was doing it like with 25% of my time maybe.
	So when I got to the point that my feet were so bad I couldn't work as a cop anymore it was a natural move to go and start selling real estate as an agent.
	I was good at that, but I did not love having the amount of conversations that you have to have when you're a real estate agent.
	You're on the phone all the time.
	You're dealing with a lot of people's emotions.
	It's just not really my personality to do that.
	I'm more about the facts.
	As an investor, I did really well, but I wasn't a great agent.
	So I ended up hiring people on my team who loved talking to people but did not have the knowledge and the expertise I had so I could coach them with what to say to the clients.
	That led to the David Green team.
	Last year, we sold $200 million in real estate.
	So we have Southern California...
	Northern California, then I opened a loan company.
	That's the one brokerage.
	We're one of the biggest lenders in the country right now, so we can do loans all throughout the country.
	And it just makes sense as you continue to grow businesses and save money and learn things about life, especially in the world of real estate, that you'd have more information to share with other people.
	There's a lot of people right now, if we're being frank, that can give you information about real estate investing.
	I mean, YouTube's full of it.
	TikTok's everywhere.
	It's hard to know who you can trust.
	There's not as many people that you can trust that can give you information about business, personal budgeting, and investing in real estate, especially with the economy you're going into.
	Be very careful where you're getting your information from.
	Yeah, no, absolutely, man.
	And a lot of people will sit there and try to tell you, oh yeah, this is how to real estate invest or whatever, or they'll try to give you some advice and they don't even have any property.
	And it's like, what the hell?
	And I'll tell you this, I've been fortunate enough, I've got 16 houses now, and I've been able to really learn a lot during the process of each closing.
	Yeah, a lot of the things that I learned, you would not learn unless you had actually been in a deal, be under contract, deal with the BS that comes with the real estate market because it can absolutely be trying.
	I know some of you guys might be wondering like, well, Myra, Myra, what are you talking about?
	Guys, like during the day, a lot of If I'm not sleeping right at the gym, I'm on the phone with my real estate agent and we're going over deals.
	We're going over figuring out if this works out, if this doesn't, cash on cash returns, etc.
	Which we're actually going to talk about here.
	But my point with this episode, guys, you guys have asked a lot about real estate.
	And Dave was in town, so I said, you know what, man?
	Let's go ahead and knock this out and get you guys pretty much a video that you can go to at any time that you can refer back to when it comes to real estate.
	But real quick before we get into it, Dave, you just dropped the book, didn't you?
	Yeah, this is the hardest book I ever had to write, my sixth one, but it's the one I'm most proud of.
	It's called Pillars of Wealth, How to Make, Save, and Invest Your Money to Achieve Financial Freedom.
	That's here on the screen.
	Yes, there you go.
	And basically, this is a book to combat all the garbage that you're going to see on TikTok and Instagram and YouTube about people that are pretending to educate you on real estate to get you into their course, and you may or may not learn anything useful.
	So it's not hard to sell people on why they should invest in real estate.
	That's why most people are listening to this right now.
	They all want to do it.
	It's very difficult to build a strategy that will sustain you for the long term.
	The people that I've found that actually are good real estate investors that make it for the long term, which is really how you make your money in real estate.
	You hold on to it for a very long period of time.
	They're people that focus on more than just acquiring it.
	They are good at saving their money, which is playing defense, and they are good at making money, which is playing offense.
	My advice that I've been giving to people for a long time is you need to be good at these three things.
	If you can't save your money and you can't budget, it doesn't matter how much money you make, you're not going to have anything to invest.
	And there's some people that are great at saving money.
	They make their own soap.
	They stitch their own clothes.
	They've been driving the same Toyota Tercel for 45 years and trying to keep it going.
	But they don't make enough money to ever get ahead and invest in real estate.
	You need to focus on all three of these.
	So the book basically spells out for each of these three pillars specific strategies that you can incorporate to get better at budgeting your money, better at keeping what you've made, and better at making more money and then investing the difference.
	People need that for sure.
	Yeah, people absolutely need that.
	What I'm going to do, guys, I'm going to read the chats, and then from this point forward, we're only going to read 20 and up because I want to make sure we got 10 things that we got to go over here.
	This is going to be the most robust step-by-step guide to get into real estate.
	So let's go ahead and hit these things real fast.
	Bill's where we at.
	This will be an end-all, be-all for real estate.
	Yeah.
	Hey, Martin, I make 50K a year, 750 credit score, 13K saved.
	I'm interested in both Bitcoin ATM, ATM together, and real estate.
	Would you just suggest I keep solving...
	Keep saving?
	Keep saving.
	Would you suggest I keep saving until I can afford to buy my first property or generate an additional income with BTM? Thanks.
	Save and get your first property, bro.
	And then house hack it with an FHA loan if you can.
	But again, it depends on your financial situation, which we're going to go over right now in these 10 steps.
	You better pay attention because you're going to have to have some things in place, guys, besides just having the money.
	Yeah, that's tough.
	Is my only option to buy out of state or wait for the market to cool?
	Those are two options.
	I would say look elsewhere that you can potentially put someone to take care of your property if you can.
	If you've got to invest out of state, that's fine.
	That's what I do.
	I invest heavily in Connecticut because I have an infrastructure there, but wherever you decide to invest, I would say have someone there that can help you.
	What would you say, David, to that real quick?
	The $50,000 a year, what he should do?
	Yeah, out of state, or should he...
	I prefer buying a primary residence first because you can put much less money down, which means you have more money to keep in reserves, or put into making the property worth more.
	I think it's a bit of a fallacy that people think that putting more money down on a property is automatically safer.
	Because you do get more equity, but that only matters if you're going to sell the property.
	It doesn't make as big of a difference in the payments as you think.
	I'd rather see someone put a quarter of the money down, 5% instead of 20%, keep the extra 15% set aside for tough times for reserves, and maybe improve the property.
	There's things that I talk about where you can add units to a property so that it will cash flow more, turn something into an ADU, an accessory dwelling unit.
	That will generate more rent.
	And also when you're buying a primary residence and then you house hack, which is a strategy where you rent out rooms in your house or rent out parts of the house, not only did you buy real estate, but you also are saving money every month that you would have been wasting in rent.
	Exactly.
	The goal is to get out of that as fast as you can.
	So house hacking really hits the investment pillar and it hits the defense pillar at the same time.
	So you can save more money and you're acquiring real estate with less money.
	That's why we're so big with telling our audience for their first property, even if you got the equity, you should probably FHA it just so that you can keep more capital.
	And multifamily if you can.
	Exactly, so that you can offset your costs.
	And then you're able to save money during that year that you're in there.
	We're actually now able to do multifamily loans at 5% down.
	Even if you already have an FHA loan, you can't get another one.
	Now you can put 5% down to get a conventional loan on a 2, 3, or 4 unit property.
	Oh, wow.
	Okay.
	Then definitely we'll talk about that as well with your lending coverage.
	Because that might be helpful for some of the people watching.
	Save more money, my friend.
	You're going to need to save a considerable amount of money before you buy real estate.
	But it's fine.
	You don't want to be a host for it.
	You've got the right mindset at 17.
	From the UK, early 20s.
	Love this show.
	This is from Chief.
	I'm increasing my earnings and my credit while watching the episodes.
	Do you think it's wise to open another line of credit and spend while paying off in full or continue with the ones I have and improve my credit history?
	That's going to be actually step one here.
	So stay tuned because that's a good question.
	Anything else?
	Yeah, right here.
	Bills?
	Wiring.
	And then Myron goes, continue the good work, Myron, at 1911.
	Don't address the copycats anymore.
	They need validation.
	The only way they can attack you is through your weakest link, Walter.
	Ignore them.
	You are great.
	Let Walter scrap for himself.
	Not built for on-screen work.
	Okay, man.
	You guys can say whatever you guys want to say, but yes.
	I mean, it is what it is.
	It's amazing how people ask us for our take.
	We give our take, and then they get mad and lose their minds.
	This guy, Mo, is a change chugger, a coin machine, a pucker-lit penny licker.
	I bet he also eats strawberry jam with...
	Right out the jar with a spoon.
	All of FNF. All of FNF. All the congrats on the pounds, Mo.
	Good stuff, man.
	That was the most backhanded compliment I've seen in a while.
	For real.
	Can we get some bare minimum numbers needed to own a first property?
	Minimum monthly income, minimum credit, debit to earnings ratio, down payments, reserves for buying anywhere in real estate.
	Stay tuned, man.
	That's going to come right now after I finish reading these.
	Okay, Kobe goes, Moe is a petty muncher.
	Fair.
	Zerka is FBI agent.
	Let's get Zerka on the FNF After Hours show permanently.
	El Abba and his pet pig that I caught digging in my trash.
	FNF on top.
	Let's go.
	See, a bunch of y'all love Zerka.
	W Blitz, W Henny Hustler, W Penny Munch, W Myron Bixby, W For Real Fresh.
	No, he means For Fresh.
	Okay.
	Are there any specific cities and states you do not recommend owning a house or having a rental in?
	California is obviously to be avoided.
	Let's say a place is not so obvious that you never think about.
	One that comes to mind that is not good is Detroit.
	Michigan in general is not a good place to invest, even though you could get houses for good prices, but the tenant laws are definitely in the tenant's favor.
	Do you have any?
	Any places I wouldn't invest in?
	It's not as cut and dry as that makes it sound.
	So the issues of is it landlord friendly, tenant friendly really only come into place if you've already made a lot of mistakes and you're having an eviction.
	So what I find is the better of the area that you...
	This is a thing that goes back to law enforcement too.
	What I found is I don't think I ever took one person to jail that had something to lose.
	Yeah.
	That you show up, there's a problem, turn the music down, don't do whatever you're doing.
	People that have something to lose, they gotta be at work the next day?
	Yes, sir.
	People who have nothing to lose are more likely to be defiant.
	So when you're buying in really good areas where you're getting better tenants that care about their credit score, that would be embarrassed about getting evicted, it never actually makes its way into the courts because they are not gonna make you evict them.
	If they can't pay their rent, they just leave.
	So if you're in a state with worse laws that favor landlords, just buy in better areas.
	You can sort of mitigate how likely you are to actually end up in court.
	Another thing too is basically the magic number is about $60,000 per year or above is the threshold where you significantly reduce your chances of having to evict somebody.
	Makes sense.
	Are there any specific cities?
	Nope, we got that one.
	Let's go.
	Big Boston CEO Network meet up this weekend.
	Cool.
	Very slayer.
	Shout out to you.
	Myron, I bought my first investor property and it was all because of you.
	I never thought I'd make it this far.
	So thank you.
	You guys should make a video on how to vend someone from your property.
	We will talk about that here in a second.
	But that's one way.
	$60,000 a year or more.
	BiggerPox and FNF changed my life.
	W has hacking method.
	Absolutely, bro.
	Caught up, Bill?
	Yep.
	All right, man.
	So guys, we are going to go into the 10 steps that you need to get into real estate investing, man, step by step.
	So the first one I wrote a list here out is step zero.
	That's how important this is, by the way, guys.
	It is...
	Improve your credit and save for the down payment.
	And the reason why I say this is step zero, guys, is if you don't have the foundation laid where you don't have good credit, well, it's going to significantly impact your ability to get good deals.
	It's going to significantly impact your ability to cash flow when you do get a loan.
	Quite frankly, it's going to make your whole process very miserable if your credit score sucks.
	You want to show some type of financial responsibility off the rip and get your credit score up.
	That means using your credit card and paying it off.
	Trying to stay below That 30% of your max credit cards.
	I know someone here asked, hey, should I open up another credit line?
	If it's going to increase your total amount of available credit, do it.
	Because let's say you have one credit card that's only $1,000, right?
	And you spend $500.
	Well, now you've effectively used 50% of your credit limit, and that knocks your credit score down.
	However, if you open up another credit line for $1,000 and you spend that $500, now you've only spent 25% of your overall credit line.
	So having more credit cards open does help with giving you...
	A higher limit, which then decreases the percentage that you actually have used.
	So that's helpful.
	But work on getting your credit score, guys, up to at least, I would say, to buy houses somewhere between a 720 to 740.
	You know, is going to put you in a good position.
	I would say with the competitive market nowadays, a 740.
	Because that way, that's going to impact your ability to get a house at a decent credit interest rate.
	Guys, I just closed on a house on Friday.
	You guys know what the interest rate is?
	8.8 right now, man.
	Sheesh.
	Fucking crazy, dude.
	And even if you're buying residential, it's an eights, which is really high.
	So you best believe if your credit score sucks, and that's me with a credit score damn near almost 800.
	So if you have a credit score that sucks, you're going to be getting 9%, 10%, and then it's going to completely destroy your ability to cash flow, which is already limited thanks to the market.
	But what's your guys' takes?
	I think people forget how much credit is important, and I think for most people, I like it to like school.
	So let's say you want to go to a good school like Yale, or for example, Harvard.
	You want to have a good study of the work that you're going to have to do to pass your exams to get into that school, and people study their whole life for that.
	Same thing with credit.
	You want to build your foundation the correct way to get into the school of life, which means, for example, your credit score from day one.
	All right, I'm 18 years old.
	How do I start?
	Yep.
	Your father, your mother, your auntie, your uncle.
	Hey, Auntie Susie, Auntie Albert.
	Sorry, Uncle Albert.
	I want to get into...
	I want to get a credit score.
	Do you mind if I hop onto your credit card and become like a partner?
	You know, like an additional...
	Become an authorized user is the hack, guys.
	Under someone that already has established credit line top into that and then you get a credit score offer offer them alone That's the easiest way to get into it guys for all you young boys that are watching 18 You know 19 20 whatever it may be and you don't have a credit card yet And you don't know how to go about it get a start a credit card watch your episode on beginner credit cards right that you can get with low to no credit and one of the biggest hacks is become an authorized user under your parents and there's books you can read to as well your credit score by Liz Weston and So just look into that, make sure that's a priority so you can actually manage to get a better credit score for yourself.
	Yeah.
	Credits comes in tiers.
	So you do have to have a minimum credit score for different loan products, but as your credit goes up, you just get better rates, but they're not wildly different.
	It's not like 2% jumps.
	So it's usually going to be somewhere like for you getting 8.8, someone with bad credit might have been offered like 9.1 or something.
	It's not going to be a huge difference, but if you don't have good credit, you can't buy real estate at all.
	And credit is really just a reflection of your financial responsibility.
	So if your credit's bad, there's some looking in the mirror to do.
	That's really what the Pillars of Wealth book is all about.
	If you don't have money, there are people that will teach you to buy real estate with no and low money down.
	There are ways to do it.
	You probably should address the fact that you don't have money before you go buy real estate.
	As a real estate investor, you've seen it takes money to make money.
	Things go wrong.
	Things break.
	It's not like buying a stock where Apple's not going to come and you say, we had a bad quarter.
	You need to give us some more money.
	There's a capital call.
	When you buy real estate, you're on the hook for what could go wrong.
	And so you're going to need to have some cash reserves.
	And I like people that look at real estate like the carrot that's going to have them put their financial house in order so that they can go buy it.
	Yep.
	Yeah.
	And also, this is a two-part step, guys.
	Not only are you improving your credit, right, to be able to even get into the game of real estate, you're also going to be saving money while you do this, okay?
	This might be, this is step zero right here, this might be a one to five-year mission slash plan where you're effectively, you know...
	Dave talked about it where he was a police officer and he was working seven days a week to save up that money.
	Typically, getting your first property is going to be the hardest, guys.
	But once you get that first property and you have that tangible asset and you control it, then things become easier and easier and easier.
	Also, budgeting is important, too.
	Yeah.
	Because if you can't budget your money from now, how do you get a budget to manage a property?
	You can't.
	Yeah.
	So what I would say is, because there's two different routes here with how much you need to save depending on what route you want to go.
	So first, obviously, work on your credit score, guys.
	Get that up.
	And then...
	Save up money so that you can put a down payment.
	Now, you have two options when it comes to that.
	You can go the FHA route, or you can go ahead the investor route and put that 20% to 25% down.
	I think for a lot of people, for their first home, house hacking is probably the best option where you're putting 3% to 5% down.
	And if you can, try to get a duplex or a triplex, or a fourplex, because this is a residential loan, so you can buy a property of up to four units to stay within residential.
	After that is commercial, and that's a whole other game, which Dave could probably speak to that more.
	But you're able, and you live in one of the units, and then you're able to collect rent from the other tenants, and then that will offset your living costs.
	Right.
	And Dave, you mentioned you have a program for 5% for first-time homebuyers?
	Yeah, so there's several different kinds of loans, right?
	You've got basically conventional loans, that's what most people are going to be getting.
	You've got what we call non-conventional or non-QM loans.
	And then you've got FHA and VA loans.
	So VA loans are available to someone that was in the military.
	You could put 0% down if you're going to be living in the house as your primary.
	Most lenders, like a real estate, like you're living in it as your primary residence or you are going to be renting it to someone else and it's an investment property.
	If you live in the property, you are considered lower risk.
	So they will let you get away with the worst credit score, you'll get a better interest rate, and you'll put less money down.
	So the idea here is you get better lending standards if you're going to be living in the house.
	Now, there's nothing that says you have to live in it for the rest of your life.
	You buy a four-unit property, you live in one of the units, you rent out the other three, you live for free or maybe make a little bit of money, and then in a year you move out.
	You go buy another one, you put 5% down or 3.5% down if you have an FHA loan available.
	Now, it cash flows more than it did because you got an extra unit to rent out, and you go repeat the next thing.
	You don't have to be a huge baller that has tons of money putting it down on expensive real estate to build up this snowball if you're willing to be a little uncomfortable and move every year.
	For a year, yeah.
	And guys, you've got to live in it for a year.
	Please don't commit mortgage fraud.
	That will get you in trouble.
	And the feds will come knocking at your door.
	So yeah, live in it for a year, guys.
	Make it happen.
	Yeah, it's going to be uncomfortable.
	Yeah, you might not be in the inner city or the cool area with all the hoes or whatever.
	But it's going to set you up for life because what you're basically doing is you're acquiring an asset for a With very little money down that you can control and the bank is giving you damn near 95% of the money.
	W, and actually speaking, guys, you're probably wondering, okay, I'm working a regular job.
	How is this possible?
	Get a second job or overtime on your job.
	I think for most people, they think, oh, you know what?
	I don't have enough money.
	Understandable, but you can work an extra job or overtime on your job.
	And for most people in here that want to get a property, listen, it takes time.
	Maybe a year, two years, but save your money up for it.
	You will get it eventually.
	Now, let's answer this question.
	Let's say they want to buy for easy numbers purposes.
	A house that's $100,000, right?
	And they're going to house hack it.
	How much money should they have total to not just move in, but closing costs, reserves for anything that might break down?
	What do you think they should have?
	You're gonna need five grand for the down payment if you're buying as a primary residence.
	You're gonna probably need another five grand in this case for closing costs.
	And then I'm gonna think you probably want another ten grand on top of that.
	Reserves?
	Yeah, reserves.
	Things that can go wrong.
	So there you go guys.
	So for every hundred thousand dollars pretty much, think of it this way, you're gonna need 20k.
	Yeah.
	Like, total.
	Minimum.
	Because remember, to define reserves for you guys, that's basically money that you have.
	God forbid something happens where you can't work, or you have vacancy where tenants aren't around, or something happens at Mercy Fix.
	Air conditioner breaks.
	Yeah, you know what I mean?
	Like, you have that money where you can make that repair immediately.
	And Fresh was transparent about that, telling you guys, he bought a house with no reserves, it was hell.
	So I spent two years working overtime at my job, struggling by the way, right?
	I was making 50 bucks an hour, regular, and I had like 13K saved up, right?
	Sorry, 15K saved up.
	I spent 12K, everything closing, everything like that, and then another 2K for like repairs, whatever.
	Long story short, I had 1K in my account savings after that.
	Now mind you, I forgot that like we need my property.
	Things break down.
	So I'm like, okay, cool.
	I got a property.
	I'm killing it.
	I'm 23 years old.
	I'm killing this shit, right?
	Then...
	Lo and behold, plumbing issues, roof issues.
	I'm like, fuck, bro.
	It's always in year one, too, when it gets bad.
	I am screwed.
	Luckily, my realtor showed to him, Nick, he mentioned White Green.
	There's a program you can use, government funding, where they fund your repairs, and I got into that program, and I covered it, but for the most part, without reserves, bro, you're screwed.
	That's very important, man.
	That's what you want.
	So I think that's a really good number to go off of.
	So guys, for every $100,000 that you're buying the house, have $20k.
	Minimum.
	Minimum.
	And that's going to cover everything.
	Closing costs, your reserves, and your down payment.
	Alright, cool.
	So that's step number one.
	Sorry, that was step zero.
	Now we're going to get into step one.
	Step one, guys, is get pre-qualified and talk to a lender.
	This is so important and so many people don't do this.
	And this applies actually even if you want to get an apartment as well.
	Not an apartment, sorry.
	If you want to buy a house, whether you want to live in it, invest, whatever it may be.
	Because you need to figure out, guys, how much house you can actually afford.
	As a realtor, right, when you were back in the day, how annoying is it for someone to come to you and say, hey, I own a property.
	Are you pre-approved?
	No.
	Is that really annoying?
	You just don't work with them.
	Yeah.
	Some realtors won't even work with you if you're not pre-approved or pre-qualified.
	What's the point?
	Yeah.
	And it's important, guys, because you need to know, the reason why getting pre-approved slash pre-qualified is so important, because you need to figure out what you can actually afford to And then look at houses in that range.
	I can't tell you how many times people just will go ahead and start looking at houses.
	They never got pre-approved, never got pre-qualified, don't know what they can actually afford because you think you might be able to afford something.
	But then they go ahead and look at your debt-to-income ratios, etc.
	You know, you want to buy that new Mercedes and you got that monthly payment.
	Every month.
	That's going to ding you guys, right?
	So that's going to ding you where your debt to income ratio goes down regardless of how much money you make.
	There's a point you mentioned earlier on a different podcast where whatever you buy within that time period could mess up your lending process.
	Yes.
	Okay.
	So this is, okay.
	And see, this is something that you don't realize until you buy a house.
	Well, us realtors know about this because this is like the bomb gets dropped on your escrow.
	It's when you open another line of credit before you close on the house.
	Yes.
	Yes.
	It could be anything, by the way.
	So this always pops up when someone's got the housing contract and they're excited and they go to the furniture store to furnish it.
	And they don't have the money, so they open another line of credit to buy the furniture.
	Or maybe you're like, I got a new house, I'm gonna have a new garage, I want a new car.
	So you go to the dealership and you open another line of credit.
	What happens is that counts against your debt to income ratio.
	And most people buy the most expensive house they possibly can for the debt to income ratio they have.
	So when you open this new line of credit or you take on additional debt, it bumps your debt to income ratio down so you no longer qualify for the loan that you had.
	And at this point, your earnest money is often at risk.
	You can't get your deposit back because you've waived your contingencies.
	You've already spent all the money on the inspections and the stuff.
	You want to look at the house.
	And then three, four days before closing, you find out that the loan won't fund.
	Yeah.
	And that's a little bit more once you get under contract and stuff like that, which we'll definitely talk about that.
	But yes, guys, once you sign a contract and you're in the process of buying the house, you don't open nothing.
	I don't even want you moving money around.
	Like you don't do shit.
	Because the thing is, you guys gotta understand is that the banks and lenders are extremely sensitive nowadays to any financial activity because of the housing crash that went down back in like 07, 08.
	So they were giving out loans like candy, the market crashed, so now they're a lot more strict.
	That's why you got private mortgage insurance paying, if you don't put down 20%, you gotta pay something called PMI. All these rules and regulations come in, so if you even move money around, you open up another credit line, et cetera, That can fuck you up and they can yank their loan from you.
	Imagine doing all the hard work, saving for two years, maybe a year and a half, and you can't get a profit because you made one choice.
	And you lose your deposit.
	There you go.
	That's the big one.
	You lose your deposit, guys.
	It's serious, man.
	And a deposit typically is you're putting down 1% of the purchase price a lot of the times.
	Between 1% to 3%, right?
	You could get away with 1% in a market like this.
	In a hot market, usually the sellers are going to want more.
	Mm-hmm.
	But it's money that you lose.
	You're not going to get that back.
	That's why you get pre-approved.
	There's a lot of rules that there's no way that we could go over every single thing.
	Like during the last crash, or actually no, I think Bush put this in a place, where the lenders, if they're going to be doing loans that are sponsored by the federal government, like Fannie Mae, Freddie Mac loans, they have to source the funds.
	They have to know where the money came from.
	They want to make sure terrorists aren't bringing money into the country and laundering it through you buying real estate.
	So when you put money in your bank account and you show proof of funds, the lender actually has to go back and say, where did that money come from?
	Was this actually your money?
	No one would ever think about that if they just wanted to go look at houses and then try to get pre-approved at the last minute when they want to buy it.
	Yeah.
	So guys, get pre-qualified.
	See what you are actually able to afford, okay?
	What you think you make and what you can afford are two different things because other things are going to come into play when they run your credit.
	They're going to see your debts, etc.
	Hell, you might have a bill that you didn't even know that you didn't pay for a hospital visit that you had five years ago that's been eating away at your credit score.
	So you really need to figure out, get pre-approved, get pre-qualified, figure out what you can afford because that's going to save you a lot of headaches.
	The worst thing ever is you go out looking at houses, you find a deal that you like, like, oh my God, I love this place.
	And then you go ahead and you try to make an offer and go through the process and you find out, oh, you can't even afford this.
	I'll never forget, bro.
	Back then, I had almost like 850 credit perfect score.
	And I had like stellar credit.
	I was about to get a range over 0% down.
	And my realtor was like, bro, if you do this shit right now, you're fucked.
	Don't do it.
	Wait till after.
	Things settle down.
	Then get it.
	It's not just the credit score.
	They're looking at your debt to income ratio.
	You take on the debt.
	And that pays up when we check your credit.
	So I tell people that at the one brokerage, the loan company, when we look at your credit, it's like a doctor checking your blood.
	You might not have known that you have these issues, but the quicker that you get yourself pre-approved, we can say, hey, did you know, like you said, you have this thing that hasn't been paid.
	It's eating away at your credit.
	Did you know if you pay off these little bills here that you forgot about, we can bump your credit score up 40 points.
	We can get you into a better interest rate.
	You could qualify for a more expensive house.
	Maybe you go from buying a two unit to a three unit now.
	That brings in an extra $1,200 a month of income just by starting getting pre-approved.
	Those small little nuances can absolutely change the deal.
	I got a property.
	I paid off all my credit cards just because I didn't want that.
	Put yourself in the best standing.
	Yeah.
	That's smart.
	That segues perfectly into number two.
	You can talk about this, Dave, in detail.
	Hire a good realtor slash start interviewing realtors.
	Can you talk about the importance of having a good realtor and how having a bad one can absolutely destroy your ability to procure property?
	Man, this is a long topic.
	Most realtors are going to be terrible.
	I am a realtor.
	I'm actually a broker, and they're probably my least favorite people in the world.
	I hate going to realtor events.
	Most of them are very pretentious.
	They're trying to build themselves up to be a bigger deal than they really are.
	They're trying to wear the nicest clothes they can, the flashiest jewelry, drive the nicest car, because they're compensating for the fact they don't really know that much about real estate.
	What's that show in LA? Selling Sunset.
	There you go.
	They try to be like that, pretty much.
	Yeah, that's exactly right.
	And most of them will sell no houses.
	I think at the office I work at, we have 100 realtors.
	About 50 of them sell zero houses a year.
	Another 30 sell one to three.
	There's nothing you're ever going to be good at if you do it one to three times a year.
	And that puts you in the top like 70% of the agents that are in the office.
	The bar to get into becoming a realtor is way too low.
	It is stupid easy.
	And everybody flocks into that industry and it's all about show.
	It's all about their social media and the way that they present themselves, but they don't actually know what they're doing.
	And they're not getting paid unless that deal closes.
	So you either have a realtor who's not very good at their job and desperate for money and is going to tell you whatever you want to hear in order to get that deal closed.
	Or you have a realtor that's really good and they're going to be able to shoot straight with you because they don't need the paycheck, but they're probably not going to answer their phone the second that you call every single time.
	You've got to pick and choose which direction you're going to go there.
	Yeah.
	And the thing with realtors, guys, is, you know, not to make fun of, you know, people, but when we have our show, how many girls come on the show and say I'm a realtor on the side?
	It's a job that you can get part-time, guys, and let's be honest here, if you're doing something part-time, you're never going to be that good at it.
	So I would say one thing you can use to filter out is hire a full-time realtor.
	Don't hire the hot girl down the street that was referred to you because you want to get laid.
	No.
	Hire a realtor that does a full-time, that's experience, and preferably you want to deal with a realtor that works with investors because they're going to have a different mindset.
	Buying a house as an investor, guys, versus buying a house just to live in are two different things, and you're looking for different things when you're trying to invest in it versus living in it.
	And yeah, first, you might be buying it as living in it and as an investor, but you want to make sure that you're buying it with that investor head-on as well.
	What you should do is do your research for yourself.
	Go on YouTube, Google, BiggerPockets, read his book, right?
	Learn about the terms and also the terminologies you need to learn in that space.
	For example, multifamily investing.
	You know, getting the loans.
	What's FHA? What's conventional?
	You know, for example, how many doors do you need?
	How much is residential?
	How much is commercial?
	These terms that you want to know...
	I asked the realtor, listen man, this is what I want to do in the future.
	These are my plans.
	Can you help me?
	And he's going to tell you, hey man, I need to do like residential or commercial or I need to do like single family.
	Perfect.
	You're not for me.
	You don't match my terms or my terminology.
	Once again, if you don't know what to do at the very beginning, how are you going to question him to figure out if he's good for you or not?
	Yeah.
	He won't know.
	So you need to learn for yourself first, then ask the realtor certain questions.
	Now I'm in this position myself because I buy houses in other states.
	And so I'm interviewing realtors for the different places I'm going to go buy.
	Yeah.
	And I gotta figure out the same thing that the listeners do.
	It's funny.
	My realtor, I met him at Toastmasters.
	So back in the day, I was trying to do more public speaking, become a little bit better at speaking.
	And I met him when he was like, I'm having a realtor.
	Then years past, he has multiple properties, Airbnbs, multifamily.
	I'm like, damn, bro, you're killing it.
	I want to buy a property.
	I got you, bro.
	This is what I want to do.
	Can you help me here?
	Don't worry, but I got you.
	And that was it.
	My favorite question to ask is what works in this market?
	Because if they're not selling a lot of houses and they don't have their finger on the pulse, they do not know how to answer it, you're going to get a long pause.
	What does work in this market?
	They're going to buy time.
	They're going to give you a BS answer.
	I know right away they're not selling a lot of houses and they don't know.
	You want the realtor that's going to tell you, I know what you want to do.
	That does not work here.
	If they know that houses sit on the market for six or seven days and they get multiple offers and you say, hey, I want to write at 20% under what it's listed at, a good realtor is going to say, bad idea.
	Don't waste your time.
	If that's what you want, let's just not even go after it.
	Or we can do that if we chase a house that's been sitting on the market three months.
	But the houses that you like, these really pretty ones, you can't go in there with a really low offer.
	You have to be aggressive with it.
	The less that your realtor will push back on you, usually the weaker they are.
	And they compensate that by being really nice.
	And really friendly and very accommodating.
	So what I tell the people on my team is we are not waiters.
	You do not go up to the client and say, would you like Coke or Pepsi?
	Can I get you anything else?
	Oh, you'd like some more salsa?
	I'll be right back with that.
	The more they're doing that, the less in control they are of the market and knowing the inventory and giving the better advice to their clients.
	You're hiring a professional who's supposed to be educated and understand.
	That's a very good fact, because a good realtor is willing to tell you no.
	Yes.
	That is a key telltale sign.
	They need to tell you no.
	If they can say no to you, sorry man, this won't work.
	And here's the thing.
	The reason why it's important for them to say no to you is because if they say no to you, that's when you get more creative.
	Okay, we can't go this route, but let's go, what about this?
	Yes.
	Oh, maybe that could work.
	For example, alright, the numbers don't work on this property.
	Right now, I'll give you all an example using myself.
	Right now, the market in Miami is fucking crazy.
	Terrible.
	Interest rates are too goddamn high for you to buy a deal and have it actually cash flow or be worth it, right?
	We're talking about cash on cash returns of like 5%, which is fucking trash, right?
	So, working with Roger, I'm like, you know what?
	Since interest rates suck, let's go ahead and try to do owner financing, which is basically the owner becomes the bank, and you can negotiate a way better interest rate.
	Yeah, you have to put more money down, and then you have to do something called a balloon payment at the end, right?
	Or you...
	Long story short, we're going to make an offer for a house where it's five years, right?
	Five years where I pay as if I'm on a 30-year loan, so the payments are for what I would pay as if it was a 30-year loan at a fixed rate of 4%, right?
	And then at the end, I got to do a balloon payment of five years, which is going to be a couple hundred thousand.
	But...
	During that time, I'm making a bunch of cash flow.
	It's like a 12, 13% cash on cash.
	And then the house is going to appreciate it because I know this market is on fire.
	And if at the end of the five-year term, I don't have the money to balloon payment, I can easily cash out, refi one of my 14 other houses and just pay that thing off.
	And now I'm good.
	What's the best part, bro?
	You got the property.
	And I got the property.
	At all costs.
	Yeah.
	But this is where you start getting, this is where you can spitball with your real estate agent, and you can come up with strategies on how to do this.
	So we're in the process right now of doing this for one of the houses, guys.
	But you're not going to be able to do this if you're with someone that's always telling you yes, with someone that's not experienced, and someone that's most importantly not creative.
	You get creative when you're told no.
	That's a good point.
	So that's something that you can also look into as well.
	And also, time isn't your friend either.
	If they're going to waste time going back and forth with you, versus actually doing the steps to educate the property, what's the point?
	Yeah.
	And owner financing, guys, is something.
	We talked about it with Justin to a pretty good degree.
	Justin Waller.
	But that's an option that you can go when you have a market like this that it's very difficult to find cash flow where you basically go.
	And the owner is basically the bank that you buy from.
	But you're able to negotiate way better terms, way better interest rates, etc.
	And David, you made a very good point earlier.
	You said realtors have to have people skills.
	I feel like most people think it's just like, okay, I'm going to go there, meet a client, and sell a house.
	No.
	It's building relationships, having a network as well, and delegating for things to happen.
	Imagine that you work at a restaurant, you're a waiter, you have to know the menu, you have to know how the kitchen works, you have to be able to talk to the clients, you have to be able to handle the register, and now...
	Nobody comes in the restaurant on their own and sits at your table.
	You have to leave the restaurant, go outside, and find someone to convince them why they should come eat at your restaurant and then do the whole job.
	Very few people in the world are prepared for a situation like that.
	Almost all of us have had W-2 jobs that somebody came to us and then we just closed the deal.
	As a realtor, no one brings you leads.
	You have to go hunt, find the client, convince them to eat at your restaurant, and then do that entire job and hope that they order something.
	They might just want to sit there and listen to the music and look at the girls and drink and waste your time.
	That's exactly right.
	It's very hard to find a person that can do that job.
	People forget it's the marketing network that makes a realtor.
	Because without that, it's just sales.
	Alright, so step three now.
	Okay, you got your realtor.
	You're gonna start looking for a house.
	And I'm saying this, I'd like to get your guys' take on it.
	Look for a house approximately 20% of your max qualifying number.
	So let's say you get a house and you're approved for a max of 100,000.
	I would say look for a house at 80k purchase price to be safe.
	Can you get more than that?
	And you could be a little bit more risky, of course.
	But I'm saying to be safe here, err on this side of caution.
	And actually that works out pretty well because we had come up earlier with that number where you should have 20% ready to go.
	So let's say you guys are going to buy a house, etc.
	And you get qualified for $100,000 up to $100,000 loan.
	You should go ahead and look at a house that's about 80K. Is what you should be doing.
	Because that way it gives you wiggle room if something happens.
	This is where your debt to income ratio comes into place.
	Let's say you're already paying a mortgage or you're paying a renter.
	Because you're going to have some bills that are recurring every month that's going to hit you with the income to debt ratio.
	So to be safe, you don't want to go ahead and max out how much house you can afford.
	You want to be comfortably below that so you can actually afford it should something happen.
	I think you start at where you're saying, and then that's what you aim for, unless you find something that if you paid more, it would cash flow more.
	There you go.
	There you go.
	And that's a fantastic caveat to that.
	If you're going to go ahead and go above that 80% threshold, hopefully you can make that back on the cash flow from the house.
	Yeah, because sometimes you pay a little more for a house that has a whole other unit.
	Yeah.
	So your mortgage goes up by $150 spending a little bit more money, but that unit brings in $1,000 in cash flow, that's a good financial decision.
	Yeah, then you absolutely do it.
	Don't do it because the kitchen looks better or you like the paint color more.
	Those are the wrong reasons to spend more in-house.
	Yeah, and I agree with you on that one.
	And a lot of lenders a lot of times will take that into account, the cash that comes in from the house, so that could help you as well, or market rents or whatever it may be.
	But to be safe, guys, let's say you're going to buy a house and it's a single family home and you're not going to have tenants in there, then maybe this 80% of what you afford can work.
	Cheapest house you can live with.
	Yeah, if it's a single family home.
	But if it's a duplex or triplex, fourplex, then you can go ahead and afford to be a little bit above that 80% because the money that you're getting from your tenants will offset that percentage that you're going over.
	Okay, so now we're on step four.
	Okay, this is super important.
	Oh shit, shout out to Rumble, man.
	We got our Rumble plaques right here.
	This is like the equivalent to the YouTube plaques.
	Shout out to Rumble, man.
	We're going to be with them tomorrow.
	You need to get a Rumble too, man.
	He makes clean content.
	David Green.
	He's green, bro.
	He's not crazy like us.
	I do like the color of it, though.
	Number four, guys, is underwrite the deal or calculate the cash flow.
	This is where you figure out your cash on cash returns, cap rates, etc.
	You could talk more about cap rates because you're in the commercial game, right?
	I dabble in it.
	I'm not super, super into it.
	Can you explain what those words mean?
	A cap rate, this is a good question and it confuses a lot of people.
	It is a measurement of how much demand there is for that asset or that income stream at this time.
	So imagine if you're buying a million dollar commercial property, and if it would bring in an 8% return, if you paid cash for it, it would be an 8 cap.
	That's what we would call it.
	If it would bring in a 6% return, if you paid cash for it, that would be a 6 cap.
	So the lower that that return is, The more demand there is for that asset.
	Because more people want it.
	So the higher price they pay means the lower of a return they're going to get.
	I know that this can be confusing, right?
	Because we would typically say a better cap number is better because I'm going to make more money.
	But the higher numbers draw more buyers, which pushes the price up, which pushes the cap rate lower.
	So if something's trading at a 4 cap, that means a lot of people want it.
	So it's very desirable, and it's harder to get, so it's going to be less profitable for you.
	Now, the idea is you want to try to buy something at a higher cap rate, like an 8, a 9, and then the market moves in your direction.
	Like, let's say you bought something out here in this neighborhood of Miami 15 years ago.
	It wasn't as popular.
	You wouldn't have to pay as much for it, so the return you get on your investment would be higher.
	Well, now it's very popular.
	Everybody wants these properties.
	That's going to push the cap rate lower, which makes the property worth more.
	And cap rate, guys, is often used with commercial real estate.
	I've seen people use it for residential as well, but that's more of a commercial term, which commercial is not my expertise at all.
	I'm a residential guy.
	Yeah, people conflate that with cash on cash return.
	They'll often use the word cap rate.
	What they're referring to is a cash on cash return residential real estate.
	And that's one of the red flags that when I hear someone who tells me that they're an investor and they talk about cap rates with residential...
	Retards.
	Yes.
	I'll be less nice about it.
	Yeah, if you're using cap rate and you're using it interchangeably with cash-on-cash returns, they're not the same at all.
	Actually, you know what?
	I've explained cash-on-cash a bunch of times, but can you go ahead and give the people a refresher?
	What's a cash-on-cash return?
	Yeah, cash-on-cash return is a way of measuring how much money you're going to get paid for how much you put in it.
	And it's necessary because you're going to have different investment opportunities and you're going to want to compare if I put my money in a bank, if I put it in a CD, if I buy stocks, if I buy real estate, which one's going to pay me the most?
	That's why we do this.
	To calculate it on real estate, you're basically going to take the income the property makes...
	Subtract the expenses, and if it's a positive number, that's your cash flow.
	That's how much you make every single month.
	You're going to multiply that by 12, because that's how much you're going to make in a year, and you're going to divide it by the money that you put into the deal.
	Your down payment, your closing costs, and how much money you spent to get the property up.
	And the goal is to get that number as high as you can.
	Because there's two metrics that determine the cash on cash return, which is the cash flow and how much money you put in, you've got two ways to improve it.
	You improve the cash flow, or you decrease the amount of money that you put in the deal.
	Yep.
	So that's how we become creative with real estate.
	Like the BRRRR method is one of the strategies that I talk about where when you refinance money out of the deal, once you're done with it, you have less money in, which means your cash on cash return will go up.
	It skyrockets.
	Yeah.
	Or you wait for rents to increase in certain markets and the cash flow goes up and that'll increase your cash on cash return as well.
	Now, to simplify for the people, right?
	So let's go ahead and actually give them tangible numbers so they can go with it.
	Let's say you buy a house for $100,000, right?
	$100,000, right?
	And the house generates $2,000 total gross, okay?
	But your expenses are $1,000.
	So you profit $1,000.
	$1,000 times 12 is $12,000.
	But you put in, let's say, to get the deal, you put in $20,000, right?
	You took $12,000.
	Yep, so you profit $12,000, but you put $20,000 into the deal to acquire the home.
	Right.
	That gives you a cash-on-cash return of 6%.
	60.
	60%.
	Sorry, shit.
	60%, 0.6%.
	So, that's crazy!
	You ain't gonna get nothing that high.
	But I did that for easy numbers for y'all.
	A more sustainable number is, yeah, you ain't gonna get no 60.
	Maybe you put a hundred grand in to get that deal.
	Right.
	So you make $12,000, you divide that by the $100,000 that you put into it, and that's gonna be a 12% return.
	That's more realistic.
	Which that's actually a fantastic return.
	But I did that for easy numbers because my math sucks.
	But you guys get the idea.
	The cash on cash is basically how much cash did you put into the deal to acquire the house.
	That does not count for the money that the bank gave you.
	It's how much money did you put in.
	So if you spend $100,000, but you're making $12,000 a year.
	Profit, by the way, this is not total.
	This is not all the money coming in.
	After you pay all your bills, you're making $12,000 a year.
	You're basically getting a 12% cash on cash return.
	Which is actually fantastic.
	I'd say anything above what?
	I'd say 8% and above?
	8% solid, especially today.
	Most properties lose money if you're looking at them.
	You get 12%, that's a very, very good return.
	I used to be 10% or above, but with the higher interest rates and the competitiveness of the market, if you're getting 8% cash on cash or higher, I'd say that's a fantastic deal.
	You should take it.
	Yeah, these are benchmarks that we shoot for, but there are things that will change that, right?
	You may accept a 2% cash-on-cash return if you're buying into the hottest neighborhood of Miami where you believe, like, man, rents are going to skyrocket, the value's going up.
	Or maybe you're buying in Kansas somewhere in a big, huge field where it's never going up.
	12% might not be worth it for me.
	If the value's never going up and the rents aren't going up, maybe I need to see a 20% cash-on-cash return to feel good.
	But it is a good baseline to start at.
	That 8% to 12% number is a good deal.
	It's a good foundation.
	Yes.
	So are you going to get a.6 cash on cash return, guys?
	No, you ain't.
	Probably not.
	But the idea here is to teach you how to calculate it.
	Your profit, not gross, your profit divided by how much cash you put in is what gives you your cash on cash return.
	And if you can get that number to 8% or higher, fantastic.
	What that means is you're getting back 8% of your investment every year.
	Yes.
	Can you imagine your realtor talking about cap rate on a resident presidential?
	Yeah.
	Bruh.
	That's an L. Okay.
	Now we are on step five.
	We're midway here, guys.
	Okay?
	Number five is, if numbers make sense, 8% cash on cash or higher, make a strong offer, okay?
	Don't lowball.
	It will get you ignored if the house is valuable.
	So, this is important, guys.
	So, you got pre-qualified.
	You got your real estate agent.
	You're looking at houses.
	You find a deal.
	You run the numbers.
	You figure out that, oh my God, I'm going to be getting 8% cash on cash on this thing.
	If I do it, I'm going to need this much money, blah, blah, blah.
	Redfin has a fantastic mortgage calculator that you can use to figure this crap out.
	Right?
	And there's a bunch of mortgage calculators you can use.
	You figure it out, 8% plus, cool.
	Now it's time to make an offer with your real estate agent.
	I would say this is where it makes a brick cute with your realtor.
	He should shine for you if he knows what he's doing.
	Dave, I'll let you take it from here as far as making a strong offer, etc., and how to go about this properly, because so many people fucked this up.
	Okay, I'm trying to give a good analogy for you guys.
	You guys are a dating podcast.
	Say you got a girl that just hit the market, just broke up with her boyfriend.
	She's not a girl that a whole lot of guys are going to be interested in.
	So are you going to go and say, hey, I'll take you to the most expensive steakhouse and you're going to jump on it in like 30 minutes after she posted that she's single?
	Probably not going to be something that you need to do.
	But let's say this is like a high quality woman that a lot of people are going to be interested in.
	You know this person's character.
	Does it make sense to say, hey, I'll take you to McDonald's?
	Someone else is going to come along and they're going to say, I'll take you somewhere better.
	I'll show a better investment.
	He's going to call her when you texted, right?
	There isn't a rule that you could follow of how you're supposed to ask out a girl or how you're supposed to buy a house.
	You need to look at the supply and demand dynamics of this.
	So to simplify, and this is, I don't know why no one talks about it, but working as a realtor for as long as I have, what I've learned is the number one thing you want to look at is the days on market.
	Yes.
	Okay?
	That house.
	Sheesh.
	It smells like...
	Cat urine.
	It's a hoarder house.
	It's been on the market for six months and nobody wants it.
	You'd be stupid to go pay full price for that house.
	But what people do is they hear this stuff and they go, well, I'm just going to throw a million lowball offers and one of them is eventually going to stick because they're just too intellectually lazy to ask why did it stick and what should I go do?
	So asking yourself how desirable that house is, how many other investors are going to want it will help you know.
	I mean, I pay over asking price for houses.
	Yeah.
	Frequently.
	That's what happens.
	I've had times where I bought, I paid over the list price, and it appraised for more than what I offered on it.
	Yeah.
	Right?
	So, like, the list price is not how much the house is worth.
	That's just, like, a suggestion the realtor's starting with.
	If it's been on the market a long time, you should offer less than the list price, and if it's Just hit the market, high quality house, very rare location, going to perform very well.
	It is okay to pay over asking price.
	I would argue the property's worth its weight in gold, and your realtor's telling you, listen man, don't waste time on this.
	If you've got to pay a little more, get it.
	Just to secure it, do it.
	Don't waste time, because like I said before, if she's a virgin, she's actually going to be worth the weight.
	Why are you taking her to McDonald's?
	That'd be stupid, right?
	Yeah, Cheesecake Factory.
	And I'll say this too, because I actually literally just dealt with this on my last house that I closed last week.
	The contract, I think they wanted like $4.40 or $4.45 or something like that.
	We offered $4.50.
	Got the deal accepted.
	Got the house.
	When we did the appraisal, it came back at $4.50.
	So it actually came back as what I offered, which is over-asking.
	And that's what it is sometimes, guys.
	Because keep in mind, when you're in a hot real estate market, you got people saying, oh, I'll offer cash.
	I'll go ahead and waive any contingencies.
	So if the inspection comes back fucked up, I don't care.
	If it appraises for less, I don't care.
	So all these things are more attractive to the seller because they're like, wow, this guy's waiving contingencies?
	So that means that we're gonna do this deal no matter what?
	Or this guy's offering cash, which means I don't gotta deal with a bank.
	I'm gonna get my money in two weeks.
	Wow.
	These are the types of people that you're competing with a lot of the times.
	And the only way that you're gonna override it is a lot of times you have to offer more is what it comes down to.
	But if the house is worth it, Do it.
	And the other thing, too, is that if you go ahead, because some of y'all will go ahead and say, oh, I'm just going to send a lowball offer in, you're not going to get a callback, bro.
	In a hot real estate market where it is a seller's market, you send lowball offers, etc., they're not going to take you seriously.
	They're not even going to respond.
	They're just going to ignore you, and you're going to lose deals because you want to be a cheapskate.
	People forget, there's BlackRock, other investors that are from out of town, out of state, out of country, willing to pay more to secure a good property.
	And if you don't want to do it yourself, they'll do it for you.
	So I think on some level, if the property's worth its weight in gold, don't waste time.
	But a realtor should tell you, listen bro.
	That's where a good realtor comes in and tells you.
	They have to be good though.
	Yes, because they have to know...
	Vice versa, for example, you could say, you know what?
	I got like $120,000 I could put on this property, but you should put like $200,000 because it's worth...
	He'll tell you, you know what?
	This property's worth paying more, so do it.
	A good realtor will know the market.
	They'll tell you, I went to look at the house and there were 10 other people there.
	They'll tell you.
	The realtor that's selling the house is inundated with offers.
	We need to offer this much to be competitive.
	That's what a good realtor can do.
	They can assess the house immediately and tell you, yo, we need to offer this to actually be competitive.
	Versus you tell them what you want to put.
	Nah, bro.
	Don't waste time.
	Put this amount.
	Let's go.
	Exactly.
	That's really a huge piece that goes on behind the curtain.
	So when I was representing clients, still the people that I'm teaching right now, It is a skill to get that listing agent to tell you what price you'd get the property for.
	So if I'm representing Myron, he wants this property at $4.50.
	He obviously doesn't want to pay more than he has to, but he doesn't want to lose it.
	It's a delicate balance.
	Yes, that's exactly right.
	What most realtors do is say, well, just tell me what are you We'll submit the offer and we'll just see what happens.
	That's not what you want.
	I would call the listing agent and I would say, hey, what is it going to take to put this donor contract right now?
	And they're going to give you some BS. They're like, well, submit your offer.
	Write your highest and best.
	We'll see how it goes.
	No, he's not going to do that.
	He's going to go buy another house.
	But this guy will do whatever I say.
	Is $475 where we need to be?
	Would you guys do that?
	He might if I told him to.
	Would that actually work?
	Now he hesitated.
	He said, would he really do that?
	He doesn't have offers anywhere near that.
	Right?
	What about $455?
	No, I think it'd have to be higher.
	Why don't you call your client right now and ask him what price it'd have to be for us to get this deal done right now?
	And there's, from the outside looking in, this sounds like you're not representing your client, but what you have to understand is, when there is only you trying to buy the house, it is you versus the seller.
	And at that point, you're trying to write the lowest offer you can get away with.
	But when there's 10 other buyers, it is you versus those 10 other buyers.
	You have to beat them.
	And that's where a good realtor will help you figure out what price we need to be.
	And then I could go back to Myron and say, hey, $4.75, you can get it.
	If not, let's just walk away and not waste our time.
	Now, he can make a decision on impact price.
	He can go put the numbers in his calculator.
	He can figure out if he likes it.
	If he doesn't, let's just go.
	We're not going to write an offer and hold our breath and hope that we get it.
	And then we're going to get a counter that says another chance to write an even higher offer because they're turning it into an auction.
	And an even better realtor, and my realtor out in Connecticut does this for me.
	She underwrites the deal before she makes the offer.
	She says, hey look, this house is making this amount.
	We need to offer this much.
	You're probably going to get this return.
	Let's do it.
	Damn.
	It's gotten to that point now.
	So she's literally like, she's like, this house generates this amount of money, or let's say it generates a certain amount of money, but she's like, this is way below market rent.
	We'll kick these tenants out or raise the rent on them, right?
	Well, it can't come out, but you get what I'm saying.
	We'll raise the rent on them and or get new tenants and we'll be where we need to be.
	Yeah, a month or two of maybe vacancy, but it's worth it.
	We should offer this much, we're going to make this much, and we can get the rents at this much because I know the competent area.
	You want a real estate agent that's competent also and knows what rent is going in that area and knows what you can get for that house.
	That's important.
	But notice, there's a synergy between you and the realtor.
	Yeah.
	She knows what you want indefinitely.
	Yeah.
	So it's kind of like, okay, Maya wants this, don't waste any time, let's go with this.
	Yeah.
	And that's my realtor in Connecticut.
	Now in Miami, same exact thing.
	Me and Roger are doing the same thing where he knows what we're trying to get.
	My standards aren't as...
	I'm not trying to get as high of a return in Miami because it's such a competitive market.
	So I'm willing to do below 10% cash on cash returns.
	But he also knows what I'm looking at.
	He's underwriting the deal before we even make an offer.
	And what he'll do is...
	He'll give me multiple scenarios.
	Yo, if you put 20% down, this is how much you're gonna make per month.
	If you put 25% down, this is how much you're gonna make per month.
	This is, if we offer this amount, he's giving me different scenarios on what we should offer.
	This is what you should, these are the conversations you need to be having with your real estate agent, guys.
	Like where you're literally going over scenarios, what we should offer, blah, blah, blah.
	Hey, we should probably offer this to be at the strongest level.
	This house generates this amount of money, et cetera.
	And you already know going into the deal, What you're offering, how much money you're probably going to make back, etc.
	And you're calculating everything.
	And every deal that I've closed, I've been pretty damn spot on with how much money I'm going to make after the deal's closed.
	You don't want to be at the closing table figuring out, oh, I wonder what my cash on cash returns are going to be.
	You should know that way before.
	Way before.
	That's a unicorn you got.
	You better take good care of that realtor.
	Yeah, yeah.
	That's very rare to find that.
	Here's a tip.
	To add to finding a good realtor, recommendations go a long way.
	Yeah.
	So I might be looking for a realtor myself, but I don't know anyone in Miami.
	But I know Myron.
	My realtor called him 60 Properties.
	Cool.
	Myron, can you show me your info with your realtor?
	Yeah.
	Done.
	Believe it or not, that's in the book, Pillars of Wealth.
	I'm telling you.
	What I'm talking about is, do you want to be the realtor that makes all the money?
	You have to understand, you're not going to get just people walking up to you and saying, take my money.
	Exactly.
	You have to do such a good job that Myron tells everybody else, this is the realtor that you need to use to get that referral business coming your way.
	And if you don't have that work ethic, if you don't have that attitude, if it's, oh, it's Friday at 7 o'clock, what's he bugging me with right now?
	You're indirectly telling that person, I don't want your business, I don't want your referrals, I don't want the next 10 years of money I could be making.
	We have this joke in our office that when someone doesn't answer their phone because they're eating lunch, that's probably a $10,000 sandwich that they just ate.
	When you're in this type of an industry, you don't have the luxury of saying, I'm not working, it's the weekend, I'm off.
	You guys understand that because you're putting in the hours.
	Wealthy people take that approach.
	Now, it doesn't mean you're going to work your life away.
	You do have to have some mental health there, but if you're trying to be good at making money, the offense pillar, you have to understand that you need to be excellent.
	You have to pursue excellence.
	You have to fall in love with the process of becoming great.
	Yeah.
	So that's very important, guys.
	Make good offers, and that offer should be contingent directly on the value of the property.
	Don't lowball a house that's going to get you a 10% cash-on-cash return so that you can try to make 13%, right?
	When you easily can make 12 or 11 at a better offer, and you acquire the home.
	You know, and then there's other things in place as well.
	Like I said, you could come in and increase the rents, right?
	If they're paying rent, you could value add.
	You can do, Dave gave the ADU, which is, I didn't even think about that, where you can put a, you said it's called an accessory dwelling unit.
	Yeah, so these are all ways that you can increase.
	Hell, I've done it before where we, you charge for parking.
	You can go ahead and add in a parking fee to increase the cash flow.
	There's many creative ways.
	You finesser, dog.
	It's all legal, man.
	Well, he understands the fundamentals.
	We said earlier, you have income, you have expenses.
	You're trying to get that cash-on-cash return as high as you can.
	You increase your cash flow by bumping up your income.
	And by decreasing your expenses.
	You add these little units, all that does is bump up the income.
	And those are literally the principles that are in that book.
	You want to be able to make more money, and you want to be able to save more of the money that you make.
	It's kind of like, remember the karate kid?
	He's teaching them the wax on, wax off, and he doesn't know what he's learning is karate.
	When you focus on these fundamentals, they make sense within real estate, they make sense within business, they make sense within your personal life.
	Everything gets easier when you master this.
	And I would say you're better off creating the cash flow than trying to save the cash flow.
	And what I mean by that is, give the seller what the hell he wants if it's a good deal.
	You become creative and find ways to maximize your profit once you acquire the property by raising rents, by ADUs, parking.
	Hell, you could put a laundry thing in there to make money.
	I know Grant Cardone talks about that all the time.
	I added a washer dryer, raised a rent by quite a bit.
	Yeah, so little things like that.
	It's better to find ways to monetize, to increase the cash flow after you acquire the property versus telling the seller, hey, give it to me for a better deal.
	That's what an amateur would do.
	They just look at what's the list price, how much low can I get it for, and that's as far as they go.
	The good operators understand the fundamentals of how this works, and they see it creatively.
	So what we say on BiggerPockets, or what I say is, don't just look for a good deal, make a good deal.
	Bam.
	Yep.
	Here's a saying that says, another man's trash is another man's treasure.
	Yep.
	And if you're smart enough and you're savvy, you can absolutely find more ways to make it a treasure.
	Yeah.
	And the biggest one, the easiest one, guys, a lot of times, when there's a hot real estate market, that means you can charge more rent.
	Yes.
	That's a great point.
	Too many people look at real estate like, if I buy it right now, what am I going to get?
	But look at the properties that I bought in 2010, about 13 years ago.
	I bought a fourplex.
	$260,000 is what I paid for it.
	Rents were $800 a month.
	Today, the rents are $2150 a month.
	It's probably worth about $650,000.
	I was going to say, everything's tripled.
	Yes, and inflation does that.
	Don't get just locked in with this tunnel vision of, where is it right now?
	If you buy in the right locations, and there's constricted supply, but demand increases, like the market you guys are in right now where you're talking about.
	People are moving into a business that are moving there.
	You want to know where the rents are today because you don't want to lose money.
	But you're not buying that property for today.
	You're buying that property for the next 40 years.
	Where are rents going?
	Where are values going?
	Yeah, the benefit, the negative of being in a hot market is you're paying more a lot of the times, but the other benefit is you can increase rents to compensate for that.
	That's right.
	And also, occupancy is going to be lower, because more people want to live there.
	Now, if you are paying attention to what we're saying, you're recognizing that this is delayed gratification.
	Oh, you meant vacancy is going to be lower.
	The longer that you wait, the better that it's going to pay.
	So what I'm saying people should do is think about, how do I survive?
	How do I own that property for 10 years or 20 years?
	If you barely, like your situation where you got lucky, you didn't have any money left over, you could have went into foreclosure pretty easy because you didn't have enough reserves, right?
	But you wouldn't make that mistake again.
	Don't buy a house and then think you're rich and go spend your money on dumb things.
	Keep saving that money so that when things go wrong, you survive and you get to the point where rents are 2150 instead of $800 a month.
	Well said.
	Step six, okay?
	You got the property, right?
	You got your real estate agent.
	You got the property.
	You made a strong offer.
	They accepted your offer.
	Let's go!
	Hooray!
	Right?
	Good.
	You got the fucking house under contract.
	Yeah!
	Now, guys, when you got a house under contract, you're going to do something called inspections.
	Okay?
	You're going to hire someone.
	They're going to come out.
	They're going to do a fucking full-on diagnosis of the house.
	They're going to go and check the roof.
	They're going to check the windows.
	They're going to check the AC unit.
	They're going to check the house for any type of issues.
	Okay?
	And what ends up happening is, Most of the time, there's gonna be something wrong where, hey, this thing needs to be replaced, this thing needs to be fixed, this needs to be updated, etc.
	This is your chance to go back to the seller and renegotiate.
	The price, yeah.
	Okay?
	Renegotiate the price.
	Now, with that said...
	A lot of sellers are going to tell you, go pound sand.
	I don't care.
	I'm not lowering the price.
	It is what it is.
	But I say it's always worth asking, especially if it's something that's big.
	If it's like a roof, hey, this is going to cost $10,000 to fix, et cetera.
	That's where you can come in and say, hey, can we get a $10,000 credit at closing?
	Termites.
	You know, termites, right?
	That's a big one that could come in, right?
	Abestus.
	Yeah.
	Abestus.
	We're not even buying them.
	But the inspection period, guys, is where...
	And also, it's a grace period where you're able to back out the deal if you want.
	Like, if the inspection comes back and you don't like it, that's your way to get out, okay?
	This is why sellers love it when you waive the inspection contingency, that even if the inspection doesn't come back the way that you want, you're staying in the deal.
	So you can see how a seller would say, oh, well, if the inspection comes back fucked up, you're going to stay?
	Oh, that's a W for me.
	But the inspection, most of the time, in a general contract, is the opportunity...
	When something comes back fucked up, that's your opportunity to renegotiate.
	What are your thoughts on the inspections?
	So inspections is like the dating period.
	So that girl hit the market.
	You got her under contract.
	She agreed to the date.
	Now you're going to try to figure out, is this marriage material or is this not a deal that I want to commit to long term?
	You don't really know what you got until you get into the inspections.
	Too many people are afraid to write an offer.
	They're afraid to get into the thing because they think that writing an offer on a house is a commitment to marriage.
	It's not even close to that.
	It is one little step forward.
	All an offer does, if you get it accepted, is give you the right to buy that house and get rid of all your competition.
	It's a benefit for the buyer.
	It's bad for the seller.
	When they accept your offer, there's no guarantee that house is going to close.
	But there is a guarantee that they can't market it to anybody else.
	This is like you're dating the person now that's a single on their profile.
	Technically, if this is an honest person, they can't date anyone else, but you don't have to marry them.
	This is where the two people are going to get to know each other.
	For the wrestling fans, you went from a Royal Rumble to a singles match.
	There you go.
	It was literally everyone was fighting each other.
	It's mayhem.
	Every man for himself.
	What you've effectively done, you've turned it into a one-on-one fight now.
	Yes.
	Hmm.
	It's a great way to put it.
	So what you want to do is rush into a one-on-one fight and then slam the brakes on when you get there and take a good, long, hard look at what this thing is.
	You're getting a home inspection.
	You're getting a pest inspection.
	You're getting a roof inspection.
	You should get the sewer line scoped.
	So a person will come in here with a little camera and they'll check to make sure that the sewer line isn't leaking as it goes out to connect to the The city, at the sewer lateral area, you can actually inspect what the rents are going to be.
	You can dive deeper and ask the property manager, well, how much vacancy is there?
	I know that my initial inspection showed I could get $1,500 a month, but what's my competition look like?
	Is there a lot of other units for rent where maybe the tenant's not going to choose mine?
	You get to inspect everything, assuming you have a contingency that allows you to back out of the deal.
	If you don't have that, like my understanding, you're waiving contingencies, you're not forced to close, but you would lose your deposit if you don't close.
	So your deposit is what's actually at risk.
	And when the inspection shows up with something that you didn't know was there or it's worse than the other houses in the neighborhood, you can go back and what you're telling the seller is that I will go back out of this deal and you will have to put it back on the market and sell it to somebody else or you can give me this credit and I'll stick with it.
	Now, you gotta understand the leverage when it comes to buying a house, right?
	Just like in the dating game, there's leverage that each side has, and if you understand that, you know when you can push it and when you don't have things on your side.
	When a seller first puts their house on the market, they have all the leverage.
	It shows up in everyone's inbox.
	It's all over Zillow.
	The realtor's getting tons of calls.
	They're trying to create a bidding war.
	That is the young woman, 18 years old to 23.
	Everybody wants it, right?
	You have to give more, a bigger effort if you want to get after that, okay?
	Now imagine, I use this analogy like it's a girl that wants to go to prom, right?
	She's not gonna say yes to a normal person.
	She's holding out for the high school quarterback when it's like six months away.
	But now you get to like three days before prom.
	They're starting to get scared.
	Am I gonna go at all?
	You're the chess master.
	You got a good shot of actually getting a really hot girl to go to prom with you, okay?
	When you're in escrow on a property, the seller is having the days on market accumulate.
	All the other competition has moved on.
	They don't want that thing anymore.
	They don't even know it's available.
	It shows pending when people are looking at the house.
	And if you back out, That seller's in trouble.
	Because now their house comes back on the market.
	It's been 40, 50 days since it went on there.
	It looks like stale product.
	All the buyers that were initially interested don't see it anymore.
	The odds of them getting an offer as good as yours goes down.
	So what you're doing is you're saying, if you don't want to give me this credit, you're going to have to put your house back on the market.
	And if it's a red-hot market, they don't care.
	A lot of times they'll have a backup offer too behind you.
	If they're smart, they will.
	A good realtor will do.
	That's what I would do.
	Say, fine, you can back out of the deal.
	That's fine.
	We have another person going to pay more than you.
	But if they don't, that's when they're more likely to accept your credit you're requesting, and you can go with a higher credit or a price reduction or some combination of the two.
	And there's nothing wrong with being a backup buyer, guys.
	I've had it before where they took another offer.
	I was the backup.
	That person failed.
	They couldn't get financing or whatever.
	They called me back.
	You still want it?
	Yeah, I fucking still want it.
	Boom.
	We're under contract and I get it.
	I would argue most people that are in contract, they don't really buy the property.
	Yeah.
	Yeah.
	Surprisingly.
	Yeah.
	The other thing, too, is that you got to know a lot of times if people are buying it as like a home or whatever...
	And they're not an investor, they might not get approved.
	Their financing might crash or something happens.
	Three things blow up deals typically.
	It's going to be the financing falls through, which might not be that you couldn't get the loan, but maybe rates went up from the time you went in there.
	And you got in at 8%.
	Now they're at 8.75 and you can't afford the house or you don't want it anymore.
	You want a cheaper house.
	The other one would be the appraisal comes in low.
	So when an appraisal comes in, though, the bank won't lend you as much of the money, so you have to bring more money to make up the difference, and people don't like that.
	It also makes them feel like they got ripped off.
	So they'll back out for that reason, which is funny because people in 2015 backed out of deals because the appraisal came in five grand, and now that house is worth like $200,000 more than it was.
	But that happens.
	And the other thing is the inspections.
	It scares the people what shows up when they do the home inspection.
	Most buyers think that a house is in perfect condition, even if it's 40 years old.
	Yep.
	Wow.
	It's funny because on the show, we have a term for girls.
	We call it the whole facts.
	Make sure that she's verified.
	Yeah.
	Just get the health facts, man, basically.
	Yeah.
	And the thing, too, I want to say, guys, if you make an offer on a house and it appraises less or there might be some situation with inspection that you don't like or whatever, look long term.
	Is this house going to more than likely appreciate significantly?
	Am I going to be able to make up some of this money on rent, etc.?
	Think long term, and a lot of the times you're going to realize that, okay, I'm paying $5K over asking, or the appraisal came back $10,000.
	I offered $100,000, the house came back appraised at $90K. Yo, is that 10k difference that much really?
	Not really.
	You know what I mean?
	Because remember, you're going to have to come to the table with more money to make up the difference because the bank is only going to give you 75 to 80%.
	But long term, in a year, two years, three years, if it's a hot market, yo, you're going to make that money back in appreciation easy.
	Yeah.
	Yeah, so you can request them to drop the price of the appraised value.
	Yeah.
	And they have the choice to either give it to you, not give it to you.
	What usually happens is you meet somewhere in the middle.
	Yeah.
	But it doesn't hurt your request unless there's a backup offer and you can't make any mistake at all because someone else is going to swoop in there.
	Exactly.
	They're going to take it from you.
	Which you should assume if you're in a hot market and you make an offer and it gets accepted and there were a bunch of other people, guaranteed there's going to be a backup offer.
	So it might be worth it to just eat the bullet of the temporary shortage.
	Okay, so...
	Somebody asked in the chats, they said, why don't they just give us the inspections before we write the offer?
	And the reason is that the sellers are stupid.
	They should do that.
	That's what I do.
	If you're going to have me sell one of your houses, I'm going to say, Myron, you might not like this, but you're going to pay $500 to get a home inspection on this house, especially if we're in a hot market.
	And it's going to cost you $500, but you're going to pay to have the inspection, and then we're going to give that to the buyers before they write their offer.
	Now what they're going to try to do is they're going to say, oh, look at all the problems with the roof or whatever.
	I'm going to write a lower offer.
	But if this is a hot market, I'm getting a bunch of offers from other people.
	And I'm going to come back to them and say, hey, you can ride it like that if you want, but just so you know, these four other people are paying a lot more than you.
	So they're going to have to pay.
	They're going to have to be the top offer.
	It doesn't matter.
	And then I'm going to come back to them and I'm going to say, by the way, you're going to need to waive your inspection contingency because I've already given you all the inspections.
	There's nothing more to see.
	I now saved you $10,000 to $20,000 in credits that they probably would have requested during the escrow period because they had to pay for their own inspections.
	So for that $500, you've saved yourself thousands of dollars in credits that you probably would have had to give once they got the inspection report.
	You've also saved yourself the chance of them backing out of the deal because of what they saw in putting your house back on the market.
	If you're selling, it is way smarter to take that approach.
	To have an inspection report ready.
	And agents don't do that.
	No one ever talks about what I'm describing.
	In fact, I take that same principle and I apply it to the other things that cause houses to fall out of contract.
	So the other thing that could blow up our deal is if the appraisal comes in low.
	So before I accept that offer, I'm going to go back to that agent and say, hey, if the house appraises low, I need you to write into your offer that you agree to pay $10,000 over the appraised price.
	You don't want to do that?
	Fine, somebody else will.
	Because that's when we have the leverage.
	And I'm also going to say, hey, your lender, just so you know, I don't know this lender.
	I don't know if they're full of shit or not.
	We're going to have them get approved with my company so that my team can take a look at the person who's saying to buy their house and we can see what's their debt to income, what's their credit score.
	Are they actually full of it or is this deal going to close?
	I've now removed the majority of the reasons that this house would fall out of contract and your chances of closing have gone way up because we prepped it ahead of time.
	Less than 1% of agents will even think about doing something like that.
	Yeah, I was going to say, I've never heard of a seller having an inspection report ready to give to you.
	I do that 100% of the listings that I take, I tell them, this is what you're going to do, and it's going to save you tens of thousands of dollars.
	Because that's when the buyer has all the leverage, is when that inspection report comes back, and they're like, hey, you're going to give me the credit, or I'm going to back out.
	I don't want to put my client in the position where they can even do that.
	Yeah.
	Are you running the appraisal as well?
	You can't run an appraisal because the lender has to order the appraisal.
	Yeah, I was going to say, yeah, the lender for the buyer has to run it.
	Correct.
	But what I do is I have them agree that they're going to pay X amount over a low appraisal price.
	Okay.
	So they can't come back and back out of the deal.
	They can't come say, hey, to appraise low, drop the price.
	I'm like, nope, you already agreed.
	We'll drop it to the appraisal price and add 10K or add 20K. You agreed to that in the beginning.
	That's actually a good thing.
	So I've done this before, too, where I've written contracts up where if it's a really hot market and it might not appraise, what I'll do is, and I really want the house, I'll say, look, I'll cover up to $10k difference.
	There you go.
	You know what I mean?
	That's how you get your offer accepted.
	Yeah, that's a good way to be competitive, guys, in a hot market is you offer.
	If it doesn't appraise, I'll pay up to $5,000, $10,000 above asking with my, you know, With extra funds or whatever it may be, because that will make you a better potential buyer as well.
	Yeah, you've got to stand out from all that.
	You're competing against the 10 other people that want that property when it's a hot market.
	Just don't apply what we're seeing right here to a slow market.
	You don't have to be aggressive if not as many other people want that asset.
	Yeah, if it's a slower market, then you can start being a bit more frugal and stuff like that.
	But in a hot market, you can't afford to do that, because you're going to lose your house every single time to someone that's going to...
	It's amazing to me how many cash buyers there are.
	That's the thing that would be killing me a lot of times.
	Cash buyers will come in and be like, I'm buying a cash, blah, blah, blah.
	And they'll make a cash offer above asking.
	Bro, it's the Canadians, it's the Russians, the Black Rocks.
	Think about the guys that are good with women get more than women, right?
	The guys that are good with money have more of the money.
	Yep, exactly.
	The people that are listening that are not good with money, they can't understand how it works.
	But it's not luck that you end up getting wealthy.
	You follow principles that wealthy people follow.
	You end up with more money.
	You've got to find somewhere to put it, right?
	Just like it's not luck that certain guys are better with women.
	It's not luck that certain guys are better in the gym.
	There's principles that people follow.
	And so there's a lot of cash buyers out there because there's a lot of people that have been sitting on a lot of cash that are good at making money.
	Where else are you going to put it right now?
	Bonds are less than inflation.
	Stock market is super inflated.
	Even though interest rates are high, real estate is still the cleanest shirt in the dirty laundry.
	Absolutely.
	And not only that, inflation is good for real estate.
	Huge.
	Because what it basically does is, as the dollar gets weaker and weaker and weaker, Well, guess what?
	That loan that you secured on that house, etc., that amount of money that you owe becomes less and less.
	Yes, that's exactly right.
	You're paying your loan back with dollars that are worth less than they were when you took out the debt.
	And at the same time that's happening, rents go up because of inflation.
	I wasn't a genius because the rents were 800 and now they're 2150.
	That's just what inflation did because our government printed a lot of money.
	So the way I look at it, if you are not investing into something like real estate, you're losing money every single day because inflation is eating it up.
	Real estate is one of the best asset classes to combat inflation by far.
	Actually, inflation works in your favor as a real estate investor.
	Yeah.
	That's really the reason we do it.
	And most millionaires have it as a part of their portfolio.
	Yeah.
	It's how they made their first million.
	Yeah.
	Okay, so what I can do is I can read some chats because we're up to step seven now.
	And guys, like the goddamn video because we've been giving y'all nonstop fire this past like 40 minutes or so on real estate.
	We have a special guest on the podcast with the girls after too as well.
	Yeah, so cool.
	What do we got here?
	And we're reading 20 and up guys just to make sure that we keep the show high and tight.
	Thanks, you guys, for everything.
	I'm 19 years old, making 10K profit per month with Amazon FBA credit score 730.
	Quick question.
	I want to start my real estate portfolio early at this age.
	Will taking FHA loan route be the best option for my situation?
	I would say yes.
	To get your first house is a fantastic way to begin.
	Pam DSLR goes, said I can't apply this here in Europe, Netherlands.
	Don't use credit scores and FHA loans, etc.
	Don't exist here.
	Also, one small family house here is $350,000 plus.
	Damn.
	People take for granted that you can get 5% down, 3.5%, even 20% down is an American thing.
	You go to other countries, you go to like Egypt, they'll give you 50% down for three years and then you gotta pay the whole thing back.
	It is very hard to finance real estate in other countries.
	Especially in Muslim countries, they don't operate on interest.
	That's true.
	Chief goes, thanks for answering Pop's questions and Pop's actions Taught me consistently, that's how we get A home when I was born and another month After I left the hospital F the haters, W Fresh, W Meyer, Chris W Mo Bills, you guys are changing Lives, also, W White women deserve less, thank you man Vaughn goes, good afternoon Fresh and Fit Been watching for years now.
	I live in Montreal, work in cold call sales for five months, and want to get into real estate, but I live in the highest tax province in Canada at 15% thoughts.
	Give them BBLs hell fresh.
	Much love.
	Yeah.
	Dude, Canada, from what I've seen, Canada is not a good real estate market, man.
	I mean, if you can, try to see if you can invest in the States.
	Canada?
	Yeah.
	Bruh.
	Canada don't.
	Canada don't.
	Oh, man.
	B-Novo goes 50 bucks.
	I inherited a paid-off home.
	I definitely plan to rent it out, but I don't know much about Real Estate Game.
	If you were me, what steps would you take?
	Love the show.
	Okay, if you inherited the home and you live in it...
	I'll put a HELOC on that bitch.
	Aka, what a HELOC is, guys, is a home equity line of credit, which basically you turn your house to equity in your home.
	Let's say the house, again, easy numbers because I'm bad at math.
	Let's say the home is worth $100,000, right?
	And you open up a home equity line of credit on that house.
	You can basically get a credit on the equity of the home up to 70% to 80% of the house open to you.
	So you'll have $80,000, $70,000 to $80,000 available to you that you can use to invest.
	Assuming you Assuming you don't have a loan on the house.
	Assuming you don't.
	Yeah, he's saying he inherited a paid off.
	It's paid off.
	Yeah.
	So if you live in it, you could do a HELOC. Now, can you do a HELOC on a house that you don't live in?
	You can, but not many banks are going to take that on because that's riskier.
	Dave described this earlier.
	When you live in a house, banks favor that because they more than likely are going to take care of the home.
	It's less risk, et cetera, when you live in it.
	If you're an investor and you do a HELOC on an investment property, it's a bit harder.
	The terms are harder.
	And there's only a few banks that do it.
	But if you live in it, it's very easy to get a home equity line of credit.
	And I would say, a lot of the times, a home equity line of credit is better than a cash-out refinance because that money is available to you at all times.
	And you can basically use it to pull that money out, buy a house, and then you can go ahead and replenish those funds later on so you don't pay too much in interest.
	That is a good comparison.
	Do you do a cash out refinance or do you do a HELOC? The upside to a HELOC is that there won't be closing costs to it.
	Cash out refinance could be anywhere between $5,000 to $15,000.
	You close the HELOC and then after that it's open to you.
	And it's only like $500 to open one.
	It's very cheap.
	The downside to a HELOC is that if you do pull the money out, the rate floats.
	Most of the time.
	Yes.
	So if you get like 3-1 arms, 5-1 arms with HELOCs, that's better.
	But usually if the rates go up, so does your payment.
	The cash out refi, you know you're locking in a lower rate.
	So that's really like the balance that you've got to weigh is if I'm going to use the money or not.
	HELOCs are best used for short-term purposes.
	You're going to get that money, you're going to use it to improve a property, then you're going to refinance it out and go put it somewhere else, or you're going to flip a house, you're going to pay off some debt, and then save it back up.
	They're not a great strategy for, let me pull 200 grand out of a house on a HELOC, and then go buy more real estate with that money.
	Because if rates go up to 12, 13, 14 percent, your HELOC's going up.
	Yeah, that 200k you took out, now you're paying a higher interest.
	And who would have thought we'd be sitting at, what did you get, 8.8 percent?
	Yeah, who would have thought that a couple years ago when they were at three and a half?
	Yeah, dude.
	Yeah.
	Yeah, it sucks, but like I said before, it's better that I invest that money, get that property, right, cash flow, with a high interest rate, with the tax purposes, et cetera, versus letting it just sit in a market and get eaten by inflation anyway.
	So, but yeah, a HELOC, I would say, in most situations, I think a HELOC is better, but HELOCs are harder to get than a cash or refinance, especially if it's an investment property.
	We have them on investment properties at the one brokerage, but the rates are not fun.
	Yeah.
	They're like probably 11, 12% right now.
	Jeez!
	But does that interest rate kick in once you pull the money out?
	Yeah.
	Okay.
	You don't pay anything to open it.
	It's just like a credit card.
	You have a line of credit.
	You don't get interest on it until you pull the money out.
	Until you actually pull the money out.
	But it is good where you have that money available to you and you can use it anytime.
	That could have saved you if you didn't have that loan that you looked out for and you had to get some money to pay for that air conditioner that broke or whatever the issues were.
	It's a great lifeline to have that you could go pull some money out of a HELOC. Even if rates are high, if you're pulling out $10,000, $12,000, that's not going to kill somebody.
	You can go pick up a shift waiting tables and make that money back.
	Yeah, and you can replenish it.
	Versus the cash out of refi, it takes, what, 30 days to close or whatever, but you get that money out and you're able to use it as well.
	So think of the HELOC, guys, as a gun that's always loaded, ready to be used, but you've got to pay if you use that gun, versus a gun that has one bullet that you're getting one time.
	You know, so it is what it is.
	Let's see here.
	What else do we got here?
	Oh, what do you...
	Y'all the goats.
	I will have $30K saved at the end of December this year.
	Credit score, $730.
	I live in Los Angeles, but can't relocate because my pay will drop due to my job.
	I want a fourplex to FHA it.
	What should I do?
	I make $5K a month and save $3K monthly.
	Yeah, dude, you're going to need way more money if you want to buy in Los Angeles.
	Yeah.
	You're going to need way more.
	You're going to need...
	California.
	Yeah, you're going to need like 200K. I mean, if they're making 5K but saving 3,000 of it, they're doing well living beneath their means.
	I would say, pick up another...
	You need to make more money, bro.
	You pick up another job or do something else to earn some extra income.
	While simultaneously, I would look at better markets.
	I would look at Las Vegas.
	All you guys in Los Angeles, look at Las Vegas, bro.
	You can even drive there.
	Yeah, it's a three-hour drive.
	You can go ahead and look at the property there.
	It's exploding in growth.
	They just got a football team put over there.
	They're trying to shift from just a tourist city to a more residential area.
	The houses are better priced.
	I think Vegas is a great upside market.
	Shit, we're going to be there on Wednesday.
	Nevada's cheaper than L.A. Yeah, we're going to be there.
	Chelsea Rumble.
	She doesn't go to Power Slap.
	You seen that?
	No, but I get told I look like Dana White.
	That's what celebrity look like, yeah.
	It's funny.
	So, yeah, man, definitely, guys, if you're in LA, man, I would look at a better market.
	But he's saying that he can't move somewhere else because he would take a decrease in pay.
	So that would be what I'd look at.
	Like, well, if I move to Las Vegas, could I make the same money, or would it be a significant drop-off?
	He probably won't make the same amount of money.
	Yeah, that's the hard thing.
	Housing is the most expensive where you make the most money.
	Where was that question again, Bills?
	The one right at the top.
	Yeah, scroll up a bit.
	Yeah.
	Yeah, he wants to FHA it too, so he's got to live in it.
	Damn.
	Yeah, bro, that's a tough situation.
	If you're going to have to stay in LA, you need more money, dude.
	30K is not going to get you anything.
	Buy pillars and learn how to make more money.
	It can happen.
	Hey guys, I'm in New Jersey and want to buy a 2-3 family house.
	My mom is wanting to take a HELOC against her home for the house.
	Should I refi a home to pay back HELOC or only refi to buy a second property and use the profit from the rent to pay back HELOC? Good question.
	What do you think, Dave?
	I'm reading the question here.
	Should I refi the home to pay back the HELOC or only refi to buy a second property and use the profit from the rent?
	If you can find a second property that's going to cash flow positively, you can get a good deal on, you're better off doing that.
	But in today's market, it becomes very, very hard to find more property, so it wouldn't be the end of the world to refinance the money, pay off the HELOC, and like you said, Myron, you still have it available if that other property comes.
	You replenish it, yeah.
	Correct.
	Especially with the way HELOCs are now, I guarantee the interest rates are above 10% with the HELOC, so yeah, it might be better to pay off that HELOC and have it available.
	That's exactly right, yeah.
	We got here.
	What do you do to set up the contracts for your tenant?
	Did you get a lawyer to write it up yourself?
	Also, the bonus episodes are fire.
	You should call the unfiltered, uncensored, off the rails since the shows go all over the place.
	Keep up the good work.
	So my real estate agent is very good, so he writes it up, but we do get it reviewed by a lawyer.
	But that's up to you, how nuanced you want to get with it.
	Just want to drop by to thank you guys for everything you do.
	Went from making 70K with zero credit history to now, first time making well over 100K in credit up in the 730s.
	Keep it to go work, man.
	That's what we're talking about, Gene.
	Good stuff, man.
	We're adding that value, bro.
	I fell in a river when I was 19 and almost froze to death.
	They sent me an ambulance bill the next week for $1,100.
	I was blacked out, and I don't recall being in an ambulance, so I threw the bill away.
	To this day, it never showed up on a credit report.
	All right, you got lucky, my friend.
	Bro.
	You're lucky as hell, bro.
	Yo, them ambulances don't play, man.
	Hey boys, I'm from a pretty wealthy family, top 5% income, but we're Muslim and interest is prohibited, meaning no loans and any property has to be bought all cash.
	With that in mind, is real estate a good investment since only upside is appreciation?
	Yes, because you can still go ahead and write off depreciation and cost segregation on your taxes, so it's still a good asset class.
	Education.
	My wife is getting $250,000 as a personal loan at 1% interest from her work.
	She's a doctor, but she has to work there for five years.
	Will it be worth to buy a home and rent it out?
	1% interest from her house?
	Oh, no.
	Doctors have special loans.
	From her work.
	Okay.
	So she's going to get $250,000 personal loan at 1% interest rate, but she has to work there for five years.
	Will it be worth to buy a home and rent it out?
	Yeah, dude.
	I mean...
	If she enjoys the job and she gets paid a good amount...
	She's going to be there anyway.
	She's going to be there anyway, more than likely, and they're able to give her a loan at 1% interest?
	$250k?
	Bro, that's a steal, kind of.
	Yeah, it's huge.
	But she's agreeing that she has to work at the hospital or whatever for five years.
	She can't leave.
	Yeah, she can't leave.
	But I would say if she doesn't mind the hospital, bro, fucking take it.
	Wait, what if they fire her?
	She already got a loan.
	You gotta look at those.
	Or what if she dies or something terrible happens?
	Does that mean that the loan has to be paid back immediately?
	Yeah, I would look at the terms.
	But if it's her being there for five years and she doesn't mind the hospital, bro, that's a fantastic deal.
	1% interest rate?
	That's free money!
	Wait, wait, hold on.
	She's telling me, as a doctor, she could work there for five years.
	What if she gets fired?
	She already got the loan.
	Does it matter?
	No, she's got to complete the five years, probably.
	She's agreeing to work there for five years to get the loan, but he's saying, what if she doesn't make the whole five years?
	Yeah.
	You've got to look at the terms.
	And he says, you know what?
	I'm going to get fired.
	Gets fired.
	Keeps the property.
	There's probably something where they can go after her and get that money back.
	They've got to read the terms.
	Yeah.
	I guarantee it's either she gets the $250,000 at the end of the five-year term, or maybe she gets a portion of it up front.
	Got it.
	And then a second portion, or maybe in the middle.
	But I guarantee there's a clause in there where they say, if you don't fulfill obligations, we reserve the right to come after you for XYZ. Garnish your bank account, whatever it is.
	So look into that, bro.
	But on paper, assuming she's gonna be there for five years, doesn't sound bad to me.
	1% interest rate is fucking crazy, bro.
	Might as well.
	That's free money.
	Wow, fresh to fit and bigger pockets, my life is complete.
	Thank you all so much, David.
	I'm looking forward to becoming an amazing real estate agent.
	Any advice to begin as an agent?
	How did you start working with a brokerage?
	Yeah, that's a good question.
	I wrote three books for real estate agents.
	Sold, Skill, and Scale.
	So I'd start off by ordering those books because there's a lot of information that no one else is going to tell you.
	It's very hard to find a mentor in this space.
	And don't fall for brokerages that pursue you and make you feel like you're special.
	It's like, I don't know, another analogy here.
	Going to a club and having a guy talk to you.
	That is every single person's experience everywhere.
	It doesn't mean you're special.
	Brokers are going to be hunting you down and making it sound like, I'm willing to give you a job offer.
	They're all headhunters.
	They're body shops.
	Brokers want to get as many agents as they can in the door.
	So I tell people to look for a brokerage that has someone that is going to take you under their wing and mentor you.
	Worry about that way more than your splits.
	Worry about that way more than the fees.
	It's much more important that you find someone that's going to show you the ropes.
	Very hard to find in this space.
	Fair enough.
	Hey, FNF, hypothetically, my friend owns four properties and has been inputting wrong information on taxes for those properties.
	What is my next move to legitimize their real estate business?
	Oh, man.
	Bro, you run, bro.
	Run the other way.
	What the fuck are you doing, man?
	Yo, man.
	He fucked up, man.
	What the hell are you doing, bro?
	If he's doing some dumb shit like that, like, hell nah, man.
	I mean, you can see...
	Get out of there.
	DJ Envy right now.
	Get out of there, man.
	Run, bro.
	Hey, Minor Fresh.
	I'm high school 17.
	I'm working 55 hours a week and going to school at the same time.
	How do I juggle school, work, starting a business, fitness, and sleep?
	For reference, 290 pounds at 5'10".
	Number one, you're fat as fuck, so you gotta lose weight.
	Number two...
	I mean, bro, just keep grinding.
	I mean, you're young.
	You got the time to make this shit happen, but it just comes down a lot of the times to time management skills.
	Maybe if you're working that much, it might be in your best interest to work out in the morning first thing before you even go to work because you might be too tired after working a shift.
	So rearranging things around can be a huge benefit to you, man.
	But yeah, priority number one, you need to lose weight, bro.
	5'10", 290", you're fat as fuck.
	You're huge.
	Fedge goes, sup guys, I don't know if you remember, I'm the guy that got hired by Jay Waller about 10 days ago, got some good news, and just seven days of work, already got promoted, wanted to tell y'all, let y'all know it's going good, and I wanted to see if you may need an SFC editor, I don't know what SFC stands for, but, oh, short form content editor.
	No, we're good, man, but thank you so much, and I'm glad you're doing well with Waller, man.
	Shout out to Justin.
	I might need one, though, if you know anybody else over there.
	Actually, yes!
	Yo, how should he contact you?
	Instagram.
	DavidGreen24 is my Instagram.
	DavidGreen24, brother.
	Hit him up on there.
	Or Justin has my number.
	He could have Justin reach out to me, too.
	There you go.
	Make sure Justin knows what's going on here.
	Yeah, because we were literally just discussing that.
	So, yes, dude.
	Hit up Dave.
	Hit up Dave, like, right now.
	All right?
	Jakarde donated $20.
	Goes, I'm 29.
	No girls or kids.
	Making $200,000 a year.
	Only monthly payment is $1.8K mortgage.
	My house is estimated on Zillow for $330,000.
	I owe $190,000.
	Should I do a HELOC or save?
	How much do you recommend?
	Why would you not do both?
	Should I work out or diet?
	Yeah.
	Do both, dude.
	Open up the HELOC so it's available to you and also simultaneously save so you don't have to use as much from your HELOC when you eventually do take money out of it.
	I bought two properties in Canada totaling $1.9 million.
	I put 20% down and payment was $7,500 Canadian a month.
	Now interest hikes of me paying $13,000 Canadian and I only received $9,500 in rental income.
	Should I hold and take a monthly loss or sell?
	Need long-term advice.
	The only reason I think they should hold is if they make really good money and save a lot.
	Most likely this is something you need to sell and get into a fixed rate debt so that doesn't keep happening.
	Especially because there's no reason to think that they're not going to keep raising rates, especially in Canada.
	That's rough.
	Why did you not...
	Guys, okay.
	Oh my god.
	Guys, when you go ahead and you do a loan...
	Bro, just get a fixed rate every single time, guys.
	Because you can end up in a situation like this where now you're paying way more money because you didn't get a fixed interest rate.
	You know what it might be?
	In Canada, I think in Canada you're forced to...
	My understanding is the majority of loans over there are like a...
	It's called a balloon payment that's due, where you've got to refinance every three to five years.
	So the rates adjust...
	With most of the loans that they have, or you have to refinance them constantly, and so you're forced to refinance them.
	They don't have a 30-year fix up there?
	Wow.
	That's an American thing.
	A lot of countries don't have it.
	They could.
	It's possible, but I think Rich Cooper just put a video out about Canadian real estate, and he's very bearish on it.
	He doesn't like it.
	And he mentioned that that's a problem that they have over there, is they're constantly having to refinance, and so when rates go up, you're stuck.
	Which is what we're going to be seeing in the commercial space here.
	In Canada, they basically only have arms, which is what we have.
	It's the equivalent to having an adjustable rate mortgage here in New States where you get a fixed rate for five to ten years and then it could shift to the market.
	Yes.
	My understanding is yes.
	And if it's not only, it's very hard to get the fixed rate loans.
	Most people don't have them.
	Australia's like that.
	Most other countries don't have the lending options we have.
	We complain a lot in America about a lot of things.
	So we're blessed then.
	We're very, very blessed.
	So in that case, then you might have to take the strategy where I know a couple of real estate investors that do this.
	They get arms on their properties, hold it for five to ten years, depending on how long the arm is, and they sell that bitch out once the arm is over.
	Which in Arm, guys, is an adjustable rate mortgage.
	Let's say they're locking it at 5% because that's the market rate for five years.
	By that fourth year, they're looking to get rid of that house and sell that house and then go ahead and buy another one.
	There's people that do that too that do it mid to short term depending on how long they're able to lock their adjustable rate mortgage in.
	Yeah.
	Don't hang on to that.
	That could get even worse.
	Yeah.
	Come on, Canada.
	Yeah, bro.
	That sucks, man.
	If that's true that you've only got arms in Canada, God damn!
	Canada don't.
	Yeah, Canada don't, man.
	You might want to, yeah, maybe sell, bro, and look at investing here in the States instead, dude, where you can get like a 30-year fixed or something like that.
	Myron's got a great agent.
	Yeah, I do got a good agent.
	I don't know if you can help foreigners, though.
	Yeah.
	Hit us up at the One Brokers.
	We have loans for foreigners.
	Okay, what do we got here?
	Own my primary residence for the last three years and have about $220K in equity.
	What do you think of getting a HELOC and using that money as a down payment on a fourplex?
	I currently don't have 3.25% APR, so I don't want to sell.
	Ooh.
	2%?
	Thank you.
	Yeah, he doesn't want to sell because he's got a really good rate.
	Yeah, he doesn't want to sell.
	And I don't think he wants to do a HELOC. No, he doesn't want to do a cash out refi because he doesn't use that rate.
	You have to do a HELOC if you want to keep the rate.
	He has no choice.
	But again, he's talking about using the HELOC as the down payment on the fourplex.
	If he just had cash in the bank, it's hard to find a fourplex that makes sense.
	Now you've got to find a place that makes sense and pay the extra interest on the HELOC. You're exponentially increasing your risk.
	When this is happening.
	So don't feel pressure that you have to go out there and you've got to buy something right now.
	Like if you get a good deal, yeah, it doesn't matter how much your interest rate is.
	It matters how good the deal works.
	But HELOCs used to be a lot easier to make work because properties were better deals.
	What else do we got here?
	Hey, watching from Australia, you guys have changed my life and I will be forever grateful for FNF. Question for the guests.
	My family home is fully paid off and worth $1.4 million.
	What would you do in this situation?
	It depends what your goals are.
	They never tell you that, do they?
	Yeah, they just ask general questions.
	Yeah, if you're not super financially savvy, you don't want to go put a mortgage on this house when you're not used to having to pay one, a HELOC would be a good idea if you're financially responsible.
	Use the gun analogy, right?
	Yep.
	Don't give a gun to someone that doesn't know how to handle a firearm.
	If you don't know how to handle debt, don't get yourself in a position.
	Oh, big one.
	If you guys are going to open up a HELOC, and it's very important that I say this, You better not use that fucking money for vacation.
	Oh, yeah.
	Cars.
	For bitches to go out on a vacation.
	Hell no.
	If you're going to open up a HELOC, guys, that money is only to procure other assets, nothing else.
	And you need to understand how to underwrite an asset, which is what we're talking about in today's show.
	This person sounds like they're not really familiar with real estate, so before you even worry about what to do with the property, spend some time educating yourself, read some books, listen to more real estate podcasts, find out what Myron's buying and go buy what My thing is, I don't even want somebody opening up a HELOC because I'm worried that you might take that money to go buy a boat, to go buy a car.
	That's what happened in 2005.
	That's what everybody was doing.
	Yeah.
	So don't do that, guys.
	What else do we got here?
	I have 293k in equity in my primary residence that I built in 2005 in Northeast Georgia.
	Divorce is about to force me to either sell or buy her ass out.
	What would be wiser?
	Sell the house and take my half and purchase a duplex or HELOC to buy her out and keep the house because I like this house and the location.
	No way I could replace the house for the same money or interest rate, which is 3.25 fixed rate 769 credit score VHA loan.
	Damn.
	Don't get married, bro.
	Don't get married, dog.
	Holy.
	Okay, so he's saying he likes to buy her out and keep the house.
	Yeah.
	Bro, it really comes...
	It's up to you, man.
	I mean, the number one thing is as long as you get her out, that's all that matters, bro.
	So, I would say objective number one is get her the fuck out of there.
	And then you can go ahead and make a decision after that.
	But yeah, figure out a way to buy her out and get her out of there.
	When you're making the decision, I would ask myself, if I had the same amount of money, would I buy this house right now, or would I buy that duplex?
	That's the best way to go.
	That's a good question.
	I'm sorry, good scenario.
	Which one's the better investment?
	Okay.
	Okay.
	What else do we got here?
	We got Soma goes, hey guys, I'm about to purchase my first property and use most of my savings, but I have a work trip coming up that's going to bank 15K. Do you still think it's a good idea?
	Don't bank on money you haven't made yet, man.
	Don't bank on money you haven't made yet.
	That will leave you in...
	Are they saying they're going to spend $15,000 on a work trip?
	I'm confused.
	Are they going to make it?
	He's going to buy his first property.
	He's going to use most of his savings, but he's saying that he's going to have...
	He's going to bank $15,000.
	Again, that $15K isn't guaranteed, and again, if you're going to go ahead and buy a house and use all your savings, you're going to be in the same situation that Fresh described before, where you become house poor.
	Are you living in this property?
	Are you going to be getting cash flow?
	I don't have enough details.
	But my question is, you're saying you're going to bank $15K, but you can afford a property without $15K, right?
	So...
	That's what he's saying.
	He's saying he could afford it now.
	He's going to drain out most of his savings, but he's going to have $15,000 coming to him with his work trip.
	I'm saying don't rely on that work trip too much.
	You're getting that $15,000.
	That's a good point.
	Oh, he's going to make $15,000.
	He's going to basically drain out his savings, buy his first property, but he's going to make $15,000 from a work trip to replenish.
	But again, that depends on how much is the house going to cost you, how much are you spending.
	$15,000 might work for you having in reserves in Kansas, but that might not work for you in New York.
	Yeah.
	So it depends.
	That's tricky.
	But yeah, man, go ahead.
	You could take the risk.
	You're young, probably, more than likely.
	If you're watching us, go ahead and take the risk.
	But just understand that you better have some money ready to go or have good credit where, God forbid, something happens, you can go ahead and make an emergency purchase on a house or a fix.
	What else we got here?
	And then the last one, we're going to close this thing out.
	We'll go continue the list.
	On 28, own my first property.
	And guys, from this point forward, we're going to go 15 up so I can make sure that we, you know, continue on with the steps.
	We'll still have a few more.
	On 28, own my first property for six years.
	Just had it appraised and have 300K equity.
	What's the best move to reinvest in real estate for passive income?
	PS, I'm from Canada.
	Canada again, bro.
	Six years.
	You can open up a HELOC, bro.
	If you got 300K in equity, you can open up a HELOC. That's what I would do versus a cash I refinance.
	David, read your book Long Distance Real Estate Investing.
	I really enjoyed it.
	But I am a federal employee living in Japan.
	What would your advice be to real estate investors living overseas?
	Shout out FNF. Good question.
	Same process if you live in Japan as if you live here.
	You understand the fundamentals.
	That book explains how to buy real estate in other states.
	So it's like that's exactly what you need if you're going to buy.
	Yeah.
	And I think he wants to buy from Japan to the States, so it just applies, bro.
	David, read that one.
	Man of Stripe goes, which is better, have a loan on one house and spend your money to buy another house, or just pay off your house and why?
	That's actually a pretty good one.
	This is a controversial take here.
	I know Dave Ramsey is going to tell you pay off the house and have no debt.
	Other people that are a bit more savvy with the real estate are going to tell you spread that money out across multiple houses so that you can go ahead and control multiple assets that appreciate while getting tax benefits.
	I would say put down the minimum required to control the asset to a varying degree.
	I agree.
	What do you think, Dave?
	If you're playing defense, paying off your asset is safer, but you're not going to make money doing that.
	And those opportunities, too.
	I'd probably agree more with Dave Ramsey's philosophies if we didn't have insane inflation.
	It just messes everything up, because the people that save with inflation lose.
	If our government was just printing money everywhere that caused all this inflation, that makes more sense.
	But when you see how much the value of assets are going up, when you see how much rents are going up, it makes more sense to buy...
	The real estate, again, that's assuming that that continues, though.
	We may be heading into a recession right now.
	It's hard to tell.
	But if that's the case, you definitely don't want to be taking on a whole bunch of debt that you don't know how to service.
	Yeah, man.
	I mean, again, this comes down to your risk tolerance levels, but I would say a healthy medium, though, is putting 20% down as an investor.
	And saving a whole bunch of money in reserves.
	Yeah, and saving money because what ends up happening is if you put 20% down as an investor, you have equity in the home, right?
	You still got to make a monthly payment, but it's not going to be as high.
	And you control the asset.
	So that's a happy medium if you don't want to buy houses all the way cash.
	What else do we got here?
	Living in Denver, making $125k, living minimally, and just start a house with you.
	I plan on buying a home, but I want to invest in real estate in Dallas and Miami while living here.
	What areas do you recommend and how do you go about purchasing while not living in a state you are buying?
	Miami's competitive, bro.
	You're going to need at least...
	$200,000 plus to buy anything in Miami that actually makes sense.
	Dallas, I don't know the market, but Texas in general is good.
	You might not be able to buy in the city of Dallas, but you'll probably be able to buy maybe in a Plano or somewhere in the Dallas-Fort Worth area at a good price.
	But let's continue on with the list here because we've still got a couple things to hit.
	So we're now at...
	Sorry, guys.
	We're now at number seven, I think.
	Okay, calculate closing costs.
	This is important, guys.
	And we figure out, pretty much, we talked about it a little bit earlier, and this is step seven.
	Closing cost, guys, is the amount of money it's going to cost you to basically close the deal.
	We would, what, 1% or 2% pretty much of the purchase price, you would say?
	Closing costs are going to be between 1% and 3% most of the time, but you can get sellers to cover a lot of your closing costs.
	So one thing that people do if, let's say, we agree on a purchase price of $500,000, is I'll say, I'll give you 510, but you've got to give me a $10,000 closing cost credit.
	So what that allows me to do, assuming the house appraise, is I can borrow a little bit more money from the bank, but I get $10,000 that I don't have to spend on closing costs that allows me to save more money.
	Yeah.
	Yeah, because the bank covers it.
	They're assuming it appraises.
	It happens to appraise.
	Because you guys got to remember that the bank is only going to give you what the house is worth.
	So let's say the house appraises at, you know, you make an offer for $100,000.
	Let's say $110,000 you make the offer.
	But the house only appraises at $100,000.
	They're only going to give you 70% to 80%.
	So they're only going to give you between 70% to 80%, which is $70,000 to $80,000.
	But the house, your contract price is $110,000.
	So you have to come with more money to the table.
	But if it appraises...
	At or above, you can go ahead and say, that's a smart way to do it actually, where if you don't have the capital, you can offset that to the bank instead.
	That's what you're doing, yeah.
	Now that made more sense when rates were lower.
	Yeah.
	It's a little more expensive to do that now, and I probably wouldn't recommend it if rates get up to 15, 16%.
	Yeah.
	But, I mean, even though rates in the eights are not great, they could be worse.
	Yeah.
	So that's a creative tip right there to save on closing costs.
	Because closing costs are typically money that comes out of your pocket to get that house, guys.
	And sometimes the seller might cover all of it for you, depending on his needs at that point in time.
	Next, step eight.
	Renovate, unless it's a turnkey.
	So, they've talked about this with the ADU, you know, when you guys get the house, right, assuming it's not a turnkey, and turnkey, guys, is when you basically buy a house and it's just like...
	Ready to go, ready to go.
	That's what you like.
	I like turnkeys, personally.
	But, you know, a lot of times you gotta come in, you gotta do some shit, paint, whatever it may be, improve some things.
	Don't be afraid to renovate, guys, especially if you're a handyman and you're good with your hands or you have a contractor that's always available.
	That's a way where you can kind of pay less for a house and then come in, make the fixes, and then increase the value significantly with not that much elbow grease, depending on the market that you're in.
	What's your thoughts on that, Dave?
	I try to only buy real estate that needs some kind of renovation.
	I always want to add value to whatever I'm buying.
	I'll buy a turnkey if I get a really good price on it or if it's my only option.
	But in general, I'm looking to buy equity.
	So I want to pay less than the property's worth if I can.
	And then I want to force equity.
	So I want to do something to add value to that property.
	And then I want to buy in an area where I'm going to get market appreciation equity.
	So I believe it's going to go up in value.
	I'm looking to kind of compile a whole bunch of small wins together to make one big win.
	Bam.
	All right.
	And then number nine, rent it out.
	All right.
	So you got the house.
	Everything is good to go.
	Rent it out.
	I guess we could talk about tenants.
	Yeah.
	How do you go about tenant screening for you, Dave?
	I don't do that.
	I let the property managers do it, right?
	Yeah.
	It's not a thing I want to mess up.
	Yeah.
	Now, if it's your first property, guys, right, because some of y'all might not have a property manager for your first property, here's some rules that you can go by.
	Try to, obviously, do your background check.
	Make sure they're not a felon or something like that.
	$60,000 tends to be the threshold where you're going to have a significantly lower chance of having to evict somebody once they make that much or more.
	And yeah, man, just interview the tenant.
	Right?
	Put the property on, you could put it on a Craigslist, you could put it on the market, whatever it may be.
	There's different ways to list your occupancy, but this is something that I would outsource as soon as you get a property manager.
	Like what, after what, one or two properties?
	I would say at this point you probably want to outsource that?
	Property management?
	Yeah.
	I did it right off the bat.
	Okay, so you did it at your first house.
	The first one I ever bought, I messed up so bad, I had to get a property manager to bail me out.
	Okay.
	And I just realized a mediocre property manager is still better than me being terrible at it.
	And I was working in law enforcement, right?
	So I'm working like six, seven days a week.
	I'm somewhere else.
	I want to focus on my career.
	If you have somebody that's got the time and they're interested in learning it, I think it's a different situation.
	But I was cutting corners.
	I was like, alright, we'll just give this guy a shot, not understanding how much of a pain it was.
	I actually got ripped off by my tenant.
	Yeah.
	Yeah, so when I bought that house, it had originally sold for $565,000.
	I bought it for $195,000.
	It was after the crash.
	Yeah.
	So I got a check back after the escrow to compensate me because I paid too much property taxes.
	They were based on the original value, and I bought it for like a third of what it used to be worth.
	Well, the bank sent the check to the property.
	They didn't send it to me.
	Even though it was an investment property, the bank just didn't look at that.
	So he gets a check for like $6,500, forges my signature, pays me the first three months of rent with my own money, and then just stops paying.
	Wow.
	Right?
	And it was like a sob story.
	It always is.
	They're gonna give you some, like, oh, poor me, but the mortgage company doesn't care about the tenant sob story.
	They're gonna keep coming to you.
	You still gotta keep paying, right?
	Yep, absolutely.
	So then you try to get them evicted, and you have to have somebody serve them the paperwork, and they don't answer the door, and they're dodging you, so you have to hire somebody to now go serve the paperwork, and then you have to go through an eviction.
	It's like six months before the person actually gets out of there.
	Meanwhile, you're still making mortgage payments, and then I got a judgment against them eventually, but the guy has no money, so there's no way I could get money From the person, long story short, had I just paid 8% to a property manager, I would have saved like $10,000 in the fees of an eviction.
	Yeah, for me, I did an FHA loan.
	So I lived in a property, a triplex, and I don't know if this is good because most people can't do this, but I became cool with my tenants.
	I built a relationship with them back and forth, and I said, you know what?
	I'm going to be here for you.
	I want to learn about properties and how to manage, be a landlord.
	And I stuck it up.
	All the hardships, calling for issues, they call me.
	Then I realized, this is a lot of work that I don't want to do.
	Yeah, yeah.
	So then I get to somebody else, and it was better.
	But at the beginning, I want to be hands-on about everything.
	Yeah.
	Learn how to do it yourself so you kind of understand what you should be paying, what you shouldn't be paying, what's being overcharged, etc.
	But I will say that, as a foundation of doing that though, when I raised the rents, you know what?
	We know why you did it.
	You painted the property.
	You gave us hurricane windows.
	You gave us central AC. You know what?
	You care about the property helping us become better?
	No problem.
	And they stayed.
	Surprisingly, they stayed.
	Even though I made $2,000 more after raising the rents.
	Which is crazy.
	Yeah, no, that's great.
	Yeah, I mean, what it really comes down to, guys, is, especially if you have a job, like you were a cop, you were working seven days a week, et cetera, to be able to acquire the capital to purchase homes, Yeah, you might want to outsource it even if it's your first real estate property.
	There's nothing wrong with taking a grace period maybe six months to a year where you do it yourself and you go through the turmoil and toil.
	Even me.
	I love people, bro, but dude, that's annoying, bro.
	You want to outsource that shit ASAP, bro.
	The complaining, stories.
	Yeah, and you get people to take advantage of you more.
	So what I tell most people, if you own the home and you're renting out rooms, you're renting out units in your house, just tell them that you're the property manager.
	It's better than saying I'm the owner.
	Yeah, you want a great separation too.
	You know what I did?
	So it's funny.
	I made my realtor the owner.
	So I was just like the guy that lived on the premises.
	So they didn't know that I was the owner.
	That's smarter.
	But I was their friend.
	Yo, you got a problem with the sink or with the toilet?
	I'm calling right now.
	Don't worry.
	I got you.
	I'm calling for you.
	So it worked out.
	Okay.
	But you got to be smart about it, though.
	Yeah, yeah.
	You want that degree of separation when you're the owner because you want to maintain that authority to agree and anonymity.
	All the soft stories like, bro, I can't pay rent.
	Bro, this happened at work.
	Listen, man.
	It's not me.
	It's the owner.
	It's very easy to hate on landlords, especially when you assume that they're just rich people with a ton of money.
	But what people don't understand is that that landlord owes people money in the same way that you owe that landlord money.
	We still have to pay property taxes.
	We still have to pay mortgages.
	When tenants decide not to leave, you have to evict them.
	One eviction can put you two, three years behind in cash flow.
	The margins are very thin on most real estate deals.
	It's not easy to do this.
	And so when tenants stop paying, then usually the properties are going to end up in foreclosure unless the person has a lot of money saved up.
	My tenants are like older men, older women, if they knew I was the landlord, me 23 years old, they'd have been like, what the fuck?
	Pay this kid?
	I'm going to pay this kid shit.
	Oh, the other thing too, I want to tell y'all guys, it's better to rent to families than to single people.
	Yes.
	By far.
	Also, work in the government.
	Yeah.
	You want them to have a stable job.
	So 60K, families is the best.
	Something to lose.
	That's what I always say.
	You work for the military, and you don't pay your rent, you're going to call their commanding officer and say, that's not a good sign for that person.
	They have something to lose.
	I mean, that's a good philosophy in general.
	Do business with people that have something to lose.
	There's other stats, too, that I would name, but we're on YouTube, so I can't say it.
	Don't do it!
	Alright, I won't say it.
	Fried chicken?
	Yeah.
	Let's move on, bro.
	Yo, man.
	Yo, man.
	All I'm going to say is there's a group of people that have the highest eviction rates.
	Corner stores?
	And I'm just going to leave it there.
	Okay?
	I'm not going to say no more.
	Winn-Dixie?
	Yeah, man.
	Let's move on, man.
	We on YouTube, so I'm not even going to say it.
	Don't worry, man.
	I got you on the screen, bro.
	I got you.
	Hey, hey.
	Grape juice?
	Yeah.
	Anybody?
	Yeah.
	So, anyway.
	Anyway.
	What's up, David?
	Wait, wait, bro.
	No comment.
	They just so happen to be...
	Yeah, statistically speaking, this is a fact.
	This is not me just talking shit.
	I'm just saying, statistically speaking...
	Some people tend to have higher eviction rates than others.
	But again, families, 60K plus per year or more.
	And yeah, and then do background checks, make sure they're not criminals.
	I gotta say this, though.
	Yeah, go ahead.
	Shut the Mahitian niggas, man.
	They be paying around on time.
	Yeah.
	My niggas, suck a fat!
	Yeah.
	Okay, so we're gonna go ahead and recap real quick here, guys.
	Yeah!
	And going to the final thing.
	So today's episode was how to buy real estate step by step.
	All the steps required to go ahead and get your first real estate property, man.
	So step zero, improve your credit slash save for a down payment.
	Step one, get pre-qualified and talk to a lender.
	Step two, hire a realtor and interview them.
	Step three, look for a house approximately 20% of your max qualifying number.
	Step four, underwrite or calculate the cash on cash returns.
	If it's residential, maybe cap rate if you're doing commercial.
	Aim for an 8% or better cash-on-cash return.
	Step five, if numbers make sense, 8% cash-on-cash return or more, make a strong offer.
	Don't lowball and lose a deal.
	Step six, do your inspections, and if something returns with the inspection that might be problematic, go ahead and ask for a credit from the seller.
	It doesn't hurt to ask.
	Some sellers might tell you no, especially if it's a hot market, but it's worth asking.
	Step seven, calculate your closing costs, one to three percent.
	Just after your point, I would say, or tell my realtor, listen, tell them I'm very serious.
	If this can be done for me, let me know.
	I'll take it right away.
	Just something like that.
	To make it more concrete.
	With the inspection?
	Yeah.
	As in like, for example, you said, if there's something that can be fixed, ask them, but say, hey, I'm very serious about a property.
	Can this be done for me?
	I'll take it.
	Okay.
	So they know that you're serious.
	Okay.
	Yeah.
	Step seven, calculate closing costs, one to three percent, and it is general ballpark.
	Step eight, renovate once you get it, unless it's a tourniquet.
	And even if it's a tourniquet, there's some things you could potentially do to increase.
	Value ads.
	Yeah.
	Step nine, rent it out.
	We talked about that, right?
	Obviously, you do your background checks, etc.
	Try to outsource this to a property manager as soon as you can.
	That's experience.
	Because it's a pain in the ass.
	You know what's funny?
	If you're the first-time person interviewing tenants, you might fall for their soft stories because you're a human being and you don't want to be a fucking dickhead.
	You might not know what to look for.
	They're going to finesse you because you don't know what's happening.
	That's what happened to me.
	He was way better at being a tenant than I was at being a landlord.
	Bro.
	Experience, man.
	And then step 10, guys.
	Last one here, okay?
	Final round.
	Make the property an LLC and begin the process of protecting your assets and use a quick claim deed to convert the purchase from your personal name over to an LLC. This is very important, guys.
	A lot of people, right, they'll go ahead and they'll try to buy the house under an LLC. That's okay, but the problem with that is I've noticed and I've done split tests with this.
	Every lender's different.
	You get way better terms when you buy it under your personal name than buying it under an LLC. Yeah.
	You get better interest rates, better terms, etc.
	So I think the better way to go is acquire the property through your personal name and your personal credit, which is, if you're doing what we're telling you, it's going to be good.
	Then, after you close on a deal, go ahead, do a quick claim deed, create an LLC, and then switch it to that LLC, and then have a holding LLC that controls all of them and a holding company, etc.
	There is a little bit of risk with it.
	Yeah.
	Because the lender can call the loan due if they find out that you did that.
	Because they made the loan to someone in their personal business.
	It doesn't mean that they will.
	It doesn't mean that you can't.
	But you have to look at the terms of the mortgage and then don't just assume you can do that.
	Good point, yeah.
	Check the terms.
	Really good point.
	That is true.
	This is coming up a lot more with the creative financing stuff because nobody wants to pay an 8.5% rate if they can take over someone else's 3.5% rate loan.
	But you got to remember that the lender made the loan to you.
	And if you're assuming that loan, they never looked at your credit score.
	They never looked at your debt to income ratio.
	They didn't make the loan.
	So they have the right in most cases, what's called a due on sale clause to say, hey, if you've given that title to somebody else, we have a right to demand the entire mortgage be paid off.
	From us.
	It doesn't mean that they're always going to do that.
	Most of the time, the way that their systems work, as long as that check's coming in, they don't care.
	And it's very common for real estate investors to put it in an LLC. But yeah, if you try to shield it and sell it to somebody or some other, yeah, that can fuck you up.
	Yeah, absolutely.
	Makes sense.
	Good point to mention.
	And then step 11, last one, is honorable mention here.
	Rinse and repeat, guys.
	You follow those 10 steps again, and you do that again.
	Speaking of burr, it's like 40 degrees inside the studio right now.
	Yeah, it's freezing, bro.
	You're good.
	You're white, nigga.
	So it says here, you know, rinse and repeat.
	If you acquired it through an FHA, guys, wait a year, live in it, and then you can go ahead and get another FHA. I think you can have up to, what, four FHAs in a lifetime?
	No, usually you can only have one at a time.
	One at a time.
	I'm saying once you complete that first year.
	In total.
	I think as long as you've paid off your FHA, you can get another one.
	You can always have one, basically.
	But once you get an FHA loan, you can't get another FHA loan when you already have one.
	I thought there was a cap at four.
	Here's the thing.
	I've heard you mention FHA before.
	There's like a slight subtle difference, right?
	FHA itself is different than a primary residence loan.
	It is a type of primary residence loan.
	Yes, yes, yes.
	So if a primary residence loan, you can get conventional loans at 5% down.
	FHAs are 3.5%.
	Yeah.
	So once you have four loans that are conventional mortgages, it becomes harder to get more.
	That's what you're thinking of.
	Then when you get to 10, you're not allowed to get another investment property under conventional financing.
	Yes.
	So I think when you're saying FHA, you just need to live in it.
	You won't get the Fannie Mae and Freddie Mac loans anymore, which is I'm past that, so I'm doing different lenders now.
	You have to do like non-QM like we were talking about.
	You get DSCR loans or portfolio lenders will do that, but...
	As long as you're saying, when you say FHA, if you mean live in the property...
	Yeah, that's what I meant.
	Primary residence type loans.
	That's what I meant.
	We conflate with FHA typically because that's the leading one, but that's what we mean.
	Where you're basically putting very little down, 3.5% to 5% down, you can do that up to four times.
	And that will help you get your situation starting, guys.
	Get your real estate portfolio cracking, especially if you don't got 20% down to put as an investor, which is fine.
	A good experience, too.
	And then you just rinse and repeat, guys.
	And that is how you go ahead, guys, and get into the real estate game.
	So this is the ultimate basic guide for a beginner from 0 to 100.
	Step by step, man.
	With David Green from Baker Pockets.
	Yeah, man.
	Yeah, and that's pretty much it, man.
	Dave, you got anything to tell people?
	They got some hot sauce on this.
	There is some deep stuff that most people will spend their whole life investing in real estate and not understand with negotiation tactics.
	I mean, last time I was here, you only had like six properties.
	Dude, you're on fire right now.
	It's good to see you.
	I'm trying to get to your level, bro.
	You got way more than me.
	Wait, how much you got right now?
	Well, I have about 50 million dollars worth of real estate.
	I don't know how many...
	Goddamn!
	See bro, we're fucking up.
	Yeah, 50 million.
	50 million worth of real estate.
	I have like 12,000 YouTube subscribers.
	You guys are doing okay.
	Bigger Pockets is huge, man.
	Actually, I started watching Bigger Pockets before I bought my first property.
	Yeah.
	You and Graham Stephan.
	Yeah.
	Really?
	Yeah.
	How's that?
	Scott Trench, his book, Step for Life.
	Step for Life?
	Yeah.
	Good book.
	That's another one.
	So basically that book I wrote, Pillars of Wealth, is kind of an extension of Set for Life.
	Yes.
	Damn.
	Guys, go get the book, man.
	Yeah, go support him, man.
	Yeah, go support him, guys.
	You can see here, obviously, he's very savvy.
	He knows more than myself.
	You know, real estate guru.
	For real, walk the talk.
	He's talk the talk and walk the walk.
	And you were involved in multiple.
	You're on the lending side.
	You're on the purchasing side as an investor.
	You're on the realtor side.
	So you literally know real estate from all perspectives.
	Like me, I could talk to y'all.
	From an investor standpoint, but I can't talk to you from a realtor perspective.
	I could give you guys kind of an idea from the lending perspective because I've dealt with it, but I'm limited to only the loans that I've done.
	Dave could talk to you all about all of it because you're involved in almost every spectrum of real estate, man.
	Real estate nerd.
	Yeah, so this is a guy that you definitely want in your corner.
	There you go.
	This is someone you definitely want in your corner, guys.
	Okay, Cardinal goes, is there an accepted standard formula for calculating the rent on a property in return to turn a profit and stay competitive for price per square foot?
	No, not price per square foot, but there is one for the purchase price of the home.
	I think you talked about the 1% rule.
	Yeah, that's tough to hit nowadays.
	But the idea would be if you can get rents every month that are around 1% of what you paid for the property, it's likely to cash flow.
	Yeah.
	So you buy a $100,000 property, you want it to rent for around $1,000 a month.
	At least.
	Is there an accepted standard for...
	Sorry, okay.
	I've been waiting for this one.
	Yes, sir.
	Also...
	Chris, keep running up that food tab.
	Matter of fact, this tip is going towards you.
	Change, modern, and fresh.
	One dollar, bro.
	That's not enough for Chris.
	Bro, for real.
	The hell, man?
	All right.
	Which is safer to invest in residential or commercial?
	Residential, 100%.
	All the way.
	Could you read my previous?
	Also, thank you for everything, guys.
	Your content has taken my credit from 640 to 720.
	Now being smarter, but what credit cards to get?
	I'm sales driving for a company, one of them boys, and use all my time slash they're working listening to books and podcasts, WFNF, to also just purchase your book, David.
	Shout out to you, my friend.
	Good stuff, man.
	Taking that initiative.
	Worst generation, I'm 18.
	You think I should do a real estate wholesaling part-time while I'm working full-time, making $25 per hour, or work two jobs and only focus on the jobs?
	How did you know that pH was per hour?
	Because I said 25, full-time making 25.
	You start to assume after a while.
	Yeah.
	It's pretty smart.
	Yeah, I just was, yeah.
	But, I mean, just weigh the pros and cons, man.
	Like, two jobs isn't bad, but if you can make more doing wholesaling, shit, why not?
	Yeah.
	Because of sales.
	Focus on the skills that you're building wholesaling, because you're probably not going to make a ton of money right off the bat.
	Yeah.
	But if your mouthpiece gets better, I mean, being able to articulate yourself is an incredibly valuable skill to have.
	You guys are great examples of that.
	Definitely, man.
	Well, him better than me, but yeah.
	I'm working on it.
	Thanks for the advice.
	This house is $400K in Oregon at 7.7% interest rate.
	I make $3,800 a month.
	I want to house hack and update the house myself since I'm handy.
	I'm just worried if I keep waiting, the money I make won't measure up in the market.
	No, man.
	Bro, always...
	If you're a handyman, fucking update that house, bro.
	Just the biggest thing, though, because a lot of people make this mistake, don't sit there and make the house too luxurious.
	Oh, yeah.
	People do that.
	Put chandeliers and marble countertops and all this other extra shit.
	Bro...
	You don't need to do all that extra shit.
	If you live in it and it's your home and you don't plan to move or rent it out, cool.
	But making things too luxurious a lot of times is going to hurt your cash on cash returns.
	And tenants don't appreciate it regardless.
	Yeah, they're going to fuck your shit up.
	You just got to go fix it again.
	But see, that person does have a pretty big advantage because they can buy real estate and pay a price that I couldn't pay.
	Because I got to go pay a contractor or a handyman and there's a margin that I'm going to have to pay.
	They can do that work themselves and they can do it over the time that they live in the house so they don't have to pay hard money or anything to get that place fixed up.
	They should be looking for messed up houses and Captain Save-A-House.
	Yeah.
	If you're a handyman, guys...
	You know renovation stuff like that, and you could do it yourself.
	That's a huge.
	That's a W. That's a big W. That's where I would say it might be worth it to spend that time doing it yourself because your returns are gonna be crazy.
	Yep.
	Also, materials now are way more expensive, bro.
	Yeah.
	Holy crap.
	Yep.
	It is.
	Ever since the conflicts in Russia, Ukraine, now we got the Middle East, and materials always go up in times of war, man.
	So that's just what it is.
	That's what we get for importing everything into our country.
	Absolutely.
	What can they find your brother?
	They can find me at davidgreen24.
	There's an E at the end of green on Instagram.
	They can check out the BiggerPockets podcast.
	We put out three episodes a week right now teaching people how to build wealth in real estate.
	Or they can go to davidgreen24.com and see what I got going on.
	Are you talking family to Robert Green?
	We joke that we are.
	We joked because we interviewed him on our podcast.
	We pretend like we were cousins.
	We're white, but not every white person is related.
	Last question for you, bro.
	Are you one of them boys?
	I'm one of them.
	Dem boys?
	Yeah, dem boys.
	Oh, my God, man.
	This guy.
	I never mind.
	Tell you after.
	Ignore him, bro.
	He's not.
	I don't think so.
	Guys, we'll catch you on the next episode of Fresh and Fit Man on After Hours Man.
	He's David Green.
	Check him out on BiggerPockets and his website.
	Get the book, man!
	Let's go!
	Stop being a brokie.
	Pillars of Wealth.
	The book is probably cheaper than what you would spend on some...
	Real estate!
	...some whore that doesn't even like you at the bar, man.
	So...
	We'll catch you guys back here for After Hours.
	Love y'all.
	This is the most best men's podcast in the world.
	Real Estate 101.
	Real value.

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