0:00

this is the bigger pockets podcast shoe

0:02

six twenty that recession

0:05

and market crash are not synonymous

0:08

are not tied together you can have

0:10

a recession with out the cost of assets

0:12

dropping especially if wealthy

0:14

people are ones owning the asset especially

0:17

the assets perform better in

0:20

recessionary environment this

0:23

, point i just want keep hammering stop

0:25

thinking that just because we're having recession

0:27

we're gonna have a market crash of we can

0:30

but it often doesn't happen with well not

0:32

everyone i'm david greene and i'm your host

0:34

of the bigger pockets real estate podcast here

0:37

today with seeing green addition

0:39

as you can see from the green halo behind

0:41

my head if you're watching on

0:43

youtube or spotify or some way that

0:45

you can actually see the podcast

0:48

we have a great show for you today were

0:50

different bigger pockets community members

0:52

come ask questions specific to their

0:54

wealth building opportunities how they want

0:56

to build out their business or where they are stuck

0:58

as well as overall strategy we

1:00

get into ways that you can keep your class down

1:03

class down as wholesaler who wants grow a business

1:05

we talked about when to replace the major

1:08

home systems in your properties h

1:10

back rubes things like that we

1:12

also digress had a deal with difficult agent

1:15

or what to look for in an agent so that

1:17

you don't end up in bad spot and

1:19

then we address when it's okay to lose your earnest

1:21

money deposit to get out of bad deal or when

1:23

you should move forward and stick with it we

1:26

also talked about the economy different

1:28

investment options in different economic

1:30

environments and my closest guess

1:32

to what i think is gonna go down looking

1:34

into the crystal ball that is shiny

1:37

in before we get to the show today

1:39

square

1:41

the of next and next the

1:44

of the seeing of this

1:46

is like being a fly on the law and

1:48

being able to listen to conversations between

1:50

both newbies and very experienced

1:52

investors sharing information freely

1:55

my advice is go check out and if see

1:57

a topic that you find is very interesting but

1:59

up

2:00

part of it or a perspective of it, that

2:02

didn't get addressed go to biggerpockets.com

2:04

david and asked me

2:06

to clarify, whatever you didn't understand

2:08

from reading conversation all right, before

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right let's get to the days first question

4:21

said at first off thank you so much for taking

4:23

my question always super inspire

4:25

but bigger pockets podcasts even

4:27

some of topics i don't even think that are

4:29

gonna pretend to me i'll listen

4:31

to it and i always want to shoot me

4:34

, be super inspire underside so

4:37

thanks that so my first main question

4:39

is that i have a buddy ryan

4:41

him and stocks and bonds which

4:43

is very successful with it and him i always

4:45

have this debate on real think market

4:47

works having i always send him

4:50

on just bits and pieces that i hearing

4:52

your guess is podcast i'm still not totally

4:54

sold on the market continued

4:56

to go up and i'm is

4:58

kind curious you could die further and adapt

5:00

why you feel like the market's gonna continue to

5:02

go up against biggest thing she's can

5:04

open up my eyes to now is

5:07

with looming assumption and if you look

5:09

at the statistics were actually already in recession

5:11

from my understanding and

5:14

yeah what were you feel

5:16

like things are gonna go once we

5:18

continue to travel down that path because

5:20

it's kind like one market goes typically

5:22

and the other market for and ago so it

5:24

you could just died further down the path

5:26

and really can't explain more fully

5:28

why you feel it's coming on directions and

5:30

ago that would be amazing on

5:33

question is this right now

5:35

our portfolio we have one long term rental

5:37

with them the hubble flips we now on

5:39

short term rental up north that we're getting going

5:42

and we're finishing a tiny house that

5:44

we do without we got and also

5:46

were doing a build up north with my

5:48

inlaws the so heavily

5:50

involved in short term rentals i'm just curious

5:53

with recession looming and

5:55

things going crazy with the market and

5:58

authentic curious where you feel like right

6:01

on how it's gonna look how the short term

6:03

rental market is gonna look if we

6:05

go down that road thank you so much for

6:07

taking my second question i really appreciate

6:10

it and take her hey there cody thank you for

6:12

the question

6:13

you are echoing the sentiment of just

6:15

about every single real estate investor

6:17

or wealth builder in general in

6:20

our country right now so if you go

6:22

in crypto space are asking the same question

6:24

but from a crypto angle what's gonna happen

6:26

with crypto if you're talking to stock

6:28

traders if you're getting to any form

6:30

of people they give financial advisor build

6:33

wealth through different securities

6:35

assets they're all trying to figure out the same

6:37

thing what's gonna happen when the economy

6:39

and will sit investors are no different now

6:41

here's what can tell you it's only gonna do one

6:43

three things economy's

6:46

going get better and prices gonna keep going

6:48

up it's gonna get worse and

6:50

prices are going to keep going down it's

6:52

going say exactly say

6:54

we never know at any time

6:56

what's gonna happen with the economy now

6:58

what sounds like you're doing with your friend is

7:00

a trap that many people fall into

7:03

what they do is they here at perspective

7:05

from someone like someone or someone else and they

7:07

say they what hey said makes said lot sense

7:09

that's elements that's perspective

7:11

he provided was really good and you go to your

7:13

friend and in your friends his job to

7:15

depict about this and about perspective

7:18

wasn't offered when i wasn't talking so then you

7:20

come back say hey what about this perspective

7:22

and then this answer it and then you go back to him as him

7:24

here's what said and then they give you another one and

7:26

this goes one forever it's like a game

7:28

of ping pong ping forrest gump

7:31

versa wall it never actually

7:33

ends so i don't think it's healthy for

7:35

to keep going back to your friend and try to save economy's

7:37

going go up with economies gonna go down because

7:40

we don't know now let me sort

7:42

of brought in the perspective of everyone

7:44

listening here academies

7:47

will go up and economies will go down

7:49

it is gonna is gonna okay

7:51

at some point cody that's gonna happen i'm

7:53

not betting that the economy's not going down

7:56

i'm not betting that economies never gonna go

7:58

down i'm betty when it goes

8:00

down it will go back i'm

8:03

betting that when it goes down i can whether

8:05

that storm because i didn't quit my job

8:07

and go work on the beach or kept working

8:09

and kept money and reserves and i lived very

8:11

frugal lifestyle so that i can

8:13

afford to make some these payments i can

8:15

actually lose money in real estate or

8:17

and short term rentals for a period time now do

8:19

i want to absolutely not i'm

8:22

an airgun nasa think that it's never gonna

8:24

happen and i'm entitled making money every

8:26

single month or every single year

8:28

that i ever own real estate that's

8:31

insane because we've

8:33

seen relative prices for so long

8:35

there is a contingency of people that believes

8:38

it , unacceptable to ever lose

8:40

money for a period of time on house

8:42

and it's just not realistic there's

8:44

no relationship that doesn't hit hard

8:46

points where people are happy happy

8:48

no child you raise that acts perfect

8:50

all the time there's no investment that

8:52

never loses money or goes bad

8:55

speed seat a successful roasted of

8:57

se is to continue to survive

8:59

when it gets bad and that's the advice

9:01

i continually give prepare

9:03

for the worse prepare for the worse prepare

9:06

for the worse i'm not person

9:08

is says get four houses and quit your job that's

9:10

very risky to me i want

9:12

you to keep that bullet proof vest on case bullets

9:14

flying again i want you to put fortress

9:17

around yourself in case the white

9:19

walkers com the white walkers

9:21

of inflation or a recession

9:23

and you're prepared cause you're standing behind

9:25

the north wall that's a game of thrones reference

9:28

that's the way that i approach wealth building or

9:30

building so

9:32

i don't know what's gonna happen and i don't have crystal

9:34

ball but i'll just tell you what i'm preparing

9:36

for we should have

9:38

went through a recession when we

9:40

shut down the country for cove and

9:42

ninety we we destroyed

9:44

our gdp we stop being productive

9:47

it

9:47

makes sense that i recession would happen as

9:49

you mentioned many people show where in recession

9:52

and i agree we are in recession

9:54

but prices aren't drop that's

9:57

what people have to understand recession

10:00

market crash or not synonymous

10:02

they're not tied together you could have

10:04

recession with out the cost of assets

10:07

dropping especially if wealthy

10:09

people are the ones owning the assets

10:11

especially to assets perform better

10:14

in a recessionary environment this

10:17

is a point i just want to keep hammering is stop

10:20

thinking that just because we're having a recession

10:22

we're gonna have market crash we can

10:25

but it often doesn't happen

10:27

i believe the reason everyone assumes

10:29

it will is , in the last

10:31

recession we had market crash but

10:33

here's why that happened the

10:35

last recession the

10:37

result of the market crashing

10:39

when i'm saying is the market didn't crash because

10:41

we had a recession we had recession because the

10:43

market crash

10:45

market crash caused recession and

10:47

that's not likely to be the case now

10:49

the the reason we had the last crash was

10:51

that loans were given that people couldn't repay

10:53

and they all resets at roughly the same

10:56

time and yeah had way too much supply

10:58

for demand that was out there homebuilders were

11:00

thrown of houses as fast as they can a people

11:02

were buying and based on pure speculation

11:05

we had too much supply and

11:07

not enough demand when all the houses

11:09

hit the market at the same time

11:11

we are in the opposite environment in

11:13

most markets that i'm looking at right now

11:16

we , too much demand and

11:18

not enough supply so i

11:20

don't know it's a key shaped recovery is

11:22

the right way to explain this but the way that

11:24

my crystal ball is working what i think

11:26

is gonna happen as going have

11:28

people at the lower end of the economy they're

11:31

going get squeezed very hard people

11:33

that don't have that don't of money their gas

11:35

is going up their food is going up their rent

11:37

is going up at their wages are not going

11:39

up and they're not able to make more money

11:41

at were then going have people

11:43

that half of the economy and i'm going described

11:46

as as people who own assets

11:48

people who have a portfolio and make their

11:50

money through mostly investing that's

11:52

the people they have followed the cash flow quadrant

11:54

as robert e saki put together and

11:57

make their money as investors not employees

11:59

and not self employed those

12:00

people are getting continue to build wealth

12:03

because their wealth is coming from assets

12:05

not from a w to job

12:08

so i don't know what's going to happen

12:10

but what i am guessing is going

12:12

to happen is that the wealthier

12:14

get a row their wealth through

12:16

this recession the

12:18

poor are going to lose more of it

12:20

and it sucks this was the problem with printing

12:23

ridiculous amounts money is seems to happen

12:25

every single time that we do it

12:27

it's like giving a kid sugar yeah they feel really

12:29

good for little bit of time in and go crazy

12:32

the any crash and that kind of what we're talking

12:34

about here is crash that's coming i just don't

12:36

know it's gonna affect home prices so the

12:38

best thing you can do you continue to buy real state

12:41

is to put more away in reserves than what you thought

12:43

before not second party or

12:45

question had to do specifically was short term

12:47

rentals are people going to keep travelling

12:50

and , gotta say this is a question is at the

12:52

top of my mind as well

12:54

i am worried about this i think about

12:56

that i've been buying short term rentals and fact

12:59

if you wanna be in the best market's gonna have to

13:01

be in the short term rental game because of this

13:03

supply and demand promise only way to make him

13:05

cashflow in lot of cases what

13:07

i'm doing to prevent against this prevent against

13:09

only buying properties in areas where i

13:11

think more wealthy people are likely frequent

13:14

that's why i'm like about it if the wealthier people

13:16

aren't is affected by the recession they're still going

13:18

to travel and that's kind why i'm getting

13:20

into the more luxury space because

13:22

that's where the people who going to be traveling

13:25

have been impacted by the

13:27

economic woes where i think the bottom half

13:29

is going to now to be clear i'm not some

13:31

greedy landlord who's reveling in

13:33

the fact that stuff people the bottom

13:35

of economic spectrum are going to get

13:37

hurt i'm actually heartbroken about that

13:40

it's very sad i don't think this

13:42

think this when a lot of other people were saying print

13:44

the money print money print the money i was on this

13:46

platform saying this is going to be worse

13:48

if we actually do it and now

13:50

the worst is coming just like someone who runs up

13:52

credit card bill and and has to pare back with interest

13:55

that's what's happening in the economy of

13:57

our country because we made those by the into the

13:59

says we

14:00

want to save up the cash and pay for it up front

14:02

like dave ramsey we wanted run up

14:04

our debt and now the bills coming do

14:06

so as to wrap all this up i

14:08

would say i don't know what's going to happen i

14:10

wouldn't try to argue with my friend and convince

14:12

them that prices going to keep going up but

14:15

what i would say if that inflation

14:17

comes a and we continue to print money

14:19

if we make more decisions or print more

14:21

money housing is going to keep getting more

14:23

expensive if we don't do that

14:25

were if they actually contract money supply

14:28

they pull money out of the economy

14:30

god that would be amazing would love it it

14:32

would cause people like me to lose money our

14:34

network my network my net

14:36

worth would drop if they constricted the money

14:38

supply because assets would become

14:40

worthless but it would be better for the country

14:42

as a whole so if see that

14:45

happening that's where i'd say okay stop

14:47

buying it's time wait for these prices have come down

14:49

into correction that happened before jump in but

14:51

until i see that happening pure interest

14:53

rate increases is not enough to slow

14:55

the demand that we have for real estate the best markets

14:58

where everybody's moving to alright next question

15:00

comes from jeff row in denver

15:02

i'm from denver colorado and i'm a new roasted of

15:04

us are focus on how citing using rent by

15:06

the room and air bnb

15:08

have any tips for what i should do after realizing

15:10

a buyer's agent representing me on a deal doesn't

15:12

have my best interest but it's too late to any about

15:15

it i miss a lot of the warning signs

15:17

a bad age but now that i'm past the termination

15:19

deadline and my earnest money will be lost if i walk

15:21

away become apparent that the buyers is i'm working

15:23

with just wants to throw me into a home without understanding

15:25

my sore and long term goals what i'm trying

15:27

to accomplish and why i'm looking to invest in

15:29

real say

15:30

the think it's worth losing out of the earnest made pilot

15:32

which is sixteen thousand and two or could a better

15:35

age and get better home for my goals and you

15:37

have any tips for how to prevent similar situation

15:41

yeah this sucks man because as agent understand

15:44

what it's like to an asian as investor understand

15:46

what it's like to an investor

15:48

i think there's an inherent flaw in the way

15:51

that ages work

15:52

or the regulatory environment i should isis

15:55

or of city environment they work in agents

15:57

on one hand work on pure commission

15:59

meeting you use them for years

16:01

and they don't make any money they actually lose

16:03

money to pay for all of their licensing requirements

16:05

their time their gas to show you homes just

16:08

by being by being to they're losing money so they

16:10

have to sell a home to make worth doing

16:12

it at all on the other hand their ass be fiduciary

16:15

meaning that they have to look out for your own best interest

16:17

that

16:18

kind crazy i don't know why we combine

16:20

fiduciary with the commission job

16:22

a lawyer is fiduciary but you pay them

16:24

by the hour you have to pay your lawyer

16:26

so makes sense to ask them to be a producer

16:28

i just think that's the idea that buyer's

16:30

agent only get paid the clothes on house

16:32

and the has to be a fiduciary is a massive

16:35

conflict of interest that makes no sense that things

16:37

are set up that way but that's the way it is

16:39

because that's the way is you often get a case where

16:41

aging is being train and tire

16:43

motivated to get into a property and sell something

16:46

and you're looking at a like they're gonna look out for

16:48

me there's an inherent conflict of interest

16:50

right up the back

16:51

that you didn't mention anything specific that

16:53

the agent did add up her concerns

16:56

me a little bit because i don't want you to get into the thought

16:58

of hey something came up that i didn't know was gonna

17:00

come up is my age it's fault there might actually

17:02

be some responsibility on your hit on

17:04

your end in this case death

17:07

where you just didn't understand

17:09

what you're doing you didn't clarity from

17:11

the age and on what their job was now is they're

17:13

making big mistakes they're making decisions

17:16

about talking to you first they're telling you don't

17:18

worry about things that you should worry about yeah

17:20

you gotta really good point here but nothing's

17:22

really been mentioned other than

17:24

they just want to throw you your home now the

17:26

specific question as should i

17:28

lose my money and find a better that

17:31

is oftentimes the right

17:34

okay so i in general

17:36

and nobody likes to lose money we don't like to

17:38

lose earnest money deposit it's

17:41

kind of the cost of doing business in a way nobody

17:43

likes to pay for a home inspection right like

17:45

i'm looking at by buying house days

17:47

very big where the inspections trying to be sitting

17:49

hundred dollars just to look at it the

17:52

odds are i'm not going they're going find much stephanie

17:54

inspection by the house so should i

17:56

not go after because i'm gonna lose fifteen

17:58

hundred dollars or do i look at what

18:00

i might have to do this ten times to get house

18:02

so i should set aside fifteen thousand dollars

18:04

for inspections and then when i

18:06

do get the white house that works there's so much

18:08

equity and there's such a good deal that

18:10

occurs the fifteen grand had spin to get their

18:12

your kind of of same situation so

18:14

looking backwards me mad at age isn't gonna

18:16

help yeah yeah to ask yourself is

18:18

this house

18:19

worth buying or is it worth

18:21

losing sixteen thousand to get a different

18:24

houses look at right where you're at and

18:26

say this is such bad deal i'm gonna lose

18:28

money on a it's gonna be a headache i'd

18:30

rather lose sixteen thousand than take

18:32

on that pro

18:33

and if it's not that bad maybe you close

18:35

on it and you just get different agent for the next

18:37

property but my advice to you and

18:39

everyone else is the same when you meet your agent

18:42

be very very clear of what

18:44

your expectations are and ask them

18:46

if they can help you you will often find

18:48

that much of what we think is an agent's job

18:50

is it the agents job or that agent

18:52

doesn't believe it's their job and if

18:54

you don't get this whole like pre marital

18:56

counseling session going on it

18:58

is very easy to end up in the situation jeff i'm

19:01

very sorry that that's the case hope gets

19:03

better the

19:03

david i'm afford a hat on move down

19:06

for next week down ,

19:08

won't be jerry i believe he just bought bought

19:11

barber bone they're about to buy of our bones

19:13

on my desk i cook was in the

19:15

guys is winter replaced my air conditioning

19:18

and heating you to reach faggot

19:20

everyone caught on him water heater

19:22

says backstories i have a place from two

19:24

thousand and five which is one i'm in right now it's

19:26

can be a rental ah milford delaware

19:29

as from two thousand five on the stats from two thousand

19:31

and thousand it's a gas

19:33

furnace and gas furnace heater in

19:36

the end of place bought in florida last

19:38

month it from

19:41

two thousand two thousand

19:43

just replace water heater to the insurance company

19:45

wouldn't give me a policy because

19:47

why he was too old ah i'm

19:49

so do candidates replace

19:51

someone from two thousand and two and and wait until

19:53

the one from oh five connor that's

19:55

our or do you just wait until either of cuts

19:58

out ah my know you probably just they

20:00

both of your reserves and be ready but

20:02

ah marty their

20:04

i didn't know do you can

20:06

be practiced since it's a run or you know wanted

20:09

to go on the tenants are in here ah

20:12

yeah basic question when you replace the it

20:14

back thanks david gotta build up lot

20:16

of reserves he can be ready no matter what happened

20:18

the

20:20

iraqi really good questions here and liked

20:22

that you mention something you said the insurance

20:24

company what you referring to was the homeowner's

20:26

insurance company and here's a quick tip for everybody

20:28

out there when you're buying a house that has

20:30

an older age tax system or

20:32

an older support system of any type

20:34

see if a home warranty

20:37

will cover replacing

20:39

it when it goes out this is a trick i

20:41

learned as agent so what will happen is will

20:43

get into negotiations with a seller

20:45

and i'm representing the buyer and

20:48

are no signs of me reworked i'm usually representing

20:50

the seller and buyer saying hey your air

20:52

conditioning units shows that it only

20:54

has a couple years of useful life laugh

20:56

we want to credit for fifteen thousand dollars

20:58

for another one why don't want my cellar to lose

21:00

hitting thousand dollars or close the deal so

21:03

instead will say as tell you what will do will

21:05

pay for two years of

21:07

your home warranty that

21:09

if it goes out it will be replaced by

21:11

home warranty and then i basically get

21:13

my cellar to have pay eight hundred or a thousand

21:15

bucks instead of fifteen thousand bucks and we saved

21:18

the deal that's typically the cheapest

21:20

way to solve this problem so if you know you have

21:22

an h faxes and they could be going out the first

21:24

thing is can i get a home warranty cover it now you

21:26

mention it's too old that's not gonna

21:28

work in as far

21:30

as windy replace it with is just my

21:32

personal opinion you let it go as long you can

21:35

before your place it assuming you can get another

21:37

part put right back in i've seen stuff

21:39

that i was told it's on it's last legs that six

21:41

years later is still running and it's running fine

21:44

that's one of the reasons i say i don't

21:46

replace right away your also a younger guy

21:48

sounds like you don't have it had capital so for

21:50

someone like me i would prior place right now

21:52

because i just don't want the headache have phone call

21:54

come in and i got a schedule it maybe when i'm

21:56

trying do something else suffers i'm

21:58

i'm do you might want it's more life out

22:00

of that thing before you replace it's the same up the

22:02

money so you can replace it but i wouldn't

22:04

replace it if it's working now

22:06

in scenario where you can't get replacement

22:09

their their supplies seen issues maybe

22:11

it's smarter does get it's now

22:13

when you're in control you want leave your tenant in

22:15

florida without air conditioning

22:17

out be absolutely miserable says

22:20

something that i would consider also give you

22:22

this little piece i've had properties in florida

22:24

that when they when vacant had the air conditioning

22:26

stolen right out the properties

22:28

to depending on where you're buying they make

22:30

cages for air conditioning units

22:32

as can put in there they make them very difficult

22:34

to steal if it's not an area

22:36

that you feel really good about it's not area

22:38

where there's neighbors they can see i have often times

22:40

are kind more rural areas out there for to where

22:42

people are see what's going on it's very easy

22:44

to grab those things back back up

22:46

into the yard rip it out there was back to

22:48

the track drive off they get your air conditioner consider

22:51

getting a cage especially to get a nice new

22:53

shiny air conditioner that's gonna be it's

22:55

billing for the entire neighborhood thieves

22:58

to see right before the next section

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of are so let's hear from today's show sponsors

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26:03

right we've had some great question so far

26:05

and want to thank everybody for submitting them please make

26:07

sure to like common and subscribes

26:09

on you tube to what you're hearing

26:11

in the segment of the show like to go over

26:13

clements we receive from other listeners

26:16

i saw neat bar got see do this and his

26:18

people often left very funny comments

26:20

and was funny when he read them so you got something

26:22

funny say i wanna hear about it

26:25

go to comments right now and leave comment

26:27

about this show and i might read your comment

26:29

on t jepsen

26:30

com it number one from real estate's grog

26:34

i

26:34

was listening to the podcast in my car as

26:36

i do every day when david said hey

26:38

siri the little globe the

26:40

little siri globe came up on my phone i thought

26:42

she only stood your specific voice i guess

26:44

i was wrong allow well this

26:47

comes from episode where we interviewed

26:49

somebody named siri and started

26:51

this shop saying hey syria and then i wondered

26:54

how many people's phones just went off

26:56

oh my series going off right now as

26:58

we speak

26:59

that's funny though apparently

27:01

that is the case i triggered series all

27:03

over the world next com it comes from

27:06

michael battista hey bigger pockets would love

27:08

to see you talk more about

27:10

flipping lease options

27:12

michael this was a very popular

27:15

strategy the past here's why it's

27:17

not as popular right now

27:19

lee's options work best when the market

27:21

isn't in a going up in price when you're

27:23

not seeing asset prices inflating it's

27:26

better for the landlord in that situation

27:28

because they put more of the class on the ten

27:30

of have to take care their own repair so cashless

27:32

higher the downside is with the

27:34

lease option you get an option buy the house

27:36

at certain price and way that

27:38

assets have been going up the been greatly

27:40

outpacing any lease option so any landlord

27:42

that did that's put themselves in situation

27:45

where they were losing massive appreciation

27:47

and equities just they could save on repairs

27:50

if we see the market slowdown a reasonable

27:52

levels or even go down little bits

27:54

i think you will see the popularity of least

27:56

options return because they make a lot more

27:59

sense when the ass is gaining value

28:01

super quick in that case may

28:03

see people selling their homes directly to the

28:05

tenets you can't save up down payment take

28:07

a portion of their rent every month to go to

28:09

words the if that happens i'm sure we'll be bringing

28:11

you more of that information stephanie

28:13

clemens l a wells i've been waiting

28:16

for you to make that leap into your preferred

28:18

version of the quick tip heard

28:21

that quick conversion many episodes

28:23

ago to step it is afraid to

28:25

the fact that my previous go has branded

28:27

turner used to love to do the quick tip would just

28:29

dark and where they would say clue tips

28:32

and four years branded force me

28:34

to do this high pitched quick tips

28:36

that i staunchly opposed i tried to work

28:38

it in my contract and i just couldn't get assigned

28:41

suited brandon was gone i went the opposite road

28:43

and i now ought to do quick to been batman

28:45

voice and where's

28:48

the tour first off it's good practice

28:50

for my batman voice and second off it just helps

28:53

me restore balance of force because force years

28:55

i was forced to do it in falsetto that

28:57

i absolutely hated there is nothing

28:59

is embarrassing is interviewing jocko willing

29:01

on your podcast and being forced to do a

29:03

high pitched quick tip with brandon

29:06

turner like you're in barbershop quartet

29:08

next comic comes from jonathan hawthorne

29:10

but when his brain and

29:12

going to come visit the podcast i miss

29:15

that guy or i

29:17

wasn't gonna say anything but because

29:19

you guys leave leave good comments i guy assets

29:21

will i did have happy with spicy cuz it's a single

29:23

episode the officers

29:25

from now you will see my best friend the

29:27

bearded wonder back joining us

29:29

on episode six twenty nine

29:31

so stay tuned in if not already subscribed

29:33

the podcasts please subscribe to both

29:36

podcast and these hoops as you get notified

29:38

when we bring branded back

29:40

and from flies on a wall

29:42

yeah i guess that comes from a bite

29:44

to be a fly on the wall during that conversation

29:47

this is a person that likes to listen the conversation

29:50

how do i submit a voice call in question

29:53

the show well we loved those we

29:55

love it when you make a video of yourself asking question

29:57

that we can put it on the shelves just got bigger

29:59

pockets com slash david and

30:01

if youre trying to remember whats the you url

30:03

as long as you remember bigger pockets dot com

30:06

and my name youll be these

30:08

questions replies resonating with

30:11

have you enjoyed hearing some of the advice that i've

30:13

given did you know that you could get home warranty

30:15

company to replace your older appliances

30:17

as long they approve it when you're in escrow

30:20

did you know you can get the seller of a house to pay

30:22

for your home warranty company to keep

30:24

the deal life i've sold ton of houses

30:26

on david greene team i've done a tunnel loads with the

30:28

one brokers and want to bring you all the

30:30

experience that i have to help you

30:32

become a better investor

30:34

also if you're in my area i want help

30:36

sell your house or help you buy a house please

30:38

hit me up about me helping you with that's

30:41

and also had a separate the one brokered help

30:43

you with them

30:44

everyone ah days to podcast ah

30:46

my name is lightest and of i'm from brooklyn york

30:49

i'm trying to wholesale my ways

30:51

my first lesson for now

30:54

i'm not really shy to do this cost effectively

30:57

the i'm

31:00

trying to figure out how best to estimate

31:02

my ass the repair value

31:04

without having to pay a contractor

31:07

or an appraiser with with every

31:09

new lead that idea that doesn't

31:11

seem very cost effective at all and

31:14

i would let me go broke the flag at my

31:16

first commission

31:18

so i think thanks thanks for your help i'm

31:23

i'm looking forward eddie murphy

31:25

i think you body this is good question

31:27

there's a few pieces i'm going to have

31:29

to pull together to give you get answer

31:32

the first would be often your realtor

31:34

can provide that for you if you have have

31:36

this cells a lotta homes in the area

31:38

that you're working with they can say

31:40

hey here's what you're after pair of a para

31:42

you would be because they sell lot of houses if you're

31:44

gonna be the realtor yourself you

31:46

gotta learn to run a comparative market analysis

31:49

this is where you take list of homes that actively

31:51

for sale homes that currently under contract

31:53

or pending and homes that have previously sold

31:56

and you see what price for what condition

31:58

and what size the home is in the together

32:00

what you think years would sell for now

32:03

here's a coffee at it's not often talked

32:05

about that you only hear if you're working with

32:07

realtor who does high volume certain

32:10

markets are much easier to predict

32:12

the rv than others

32:14

let me give example when i was buying in jacksonville

32:16

florida if i was in a specific zip

32:18

code and knew it was four bedrooms

32:21

and two bathrooms i to give you

32:23

a pretty tight rains like one hundred

32:25

forty to one hundred and sixty thousand and rv

32:27

unless there was something incredibly unique

32:29

about the

32:31

in other markets like california where

32:33

i saw houses for clients are a are

32:35

these are all over the place

32:37

big homes small homes homes

32:39

with views track homes custom homes

32:42

it's much harder to track down what

32:44

the every is going to beats and we have much

32:46

bigger discrepancies with the appraisers

32:49

when they actually come back with their appraised

32:51

value so depending on the market

32:53

you're in it could be close to impossible

32:55

to really nail it down or it could be pretty

32:57

simple most investors

32:59

are by in cash flow markets there's

33:02

not a huge discrepancy in the price of

33:04

the asset class so here's

33:06

what i would do i would talk to other investors

33:08

or other real estate agents and i'd say hey

33:10

a neighborhood like this standard three

33:13

bedroom two bathroom not a lot of

33:15

issues but not upgraded what is cell for

33:17

and they're getting give you arrange i then

33:19

go look on zillow or realtor

33:21

or whatever website you use look

33:23

up standard three bedrooms two bathrooms

33:25

and verify if that rains they're talking

33:27

about makes sense i

33:29

would they do the same thing for what's your standard

33:31

for bedroom two bathroom four

33:34

bedroom three bathroom and

33:36

all you're trying do is build a baseline

33:38

understanding of the reins that those

33:40

houses are going for to you may

33:42

see hey if it's you know sixteen hundred square feet

33:44

or less it's gonna be worth when eighty it's if

33:46

you're getting into two thousand square feet they start

33:48

bump into the to tend to twenty range

33:50

something like that to just get a baseline

33:53

to go by once you have the baseline

33:55

then you can actually put together waiting to rv

33:57

based on the detail of what you're

33:59

in putting the house question five

34:01

comes from brandon in grand rapids michigan

34:04

my portfolio is seven door single

34:06

family rentals for door short term rentals

34:09

and

34:10

eight doors rent to own mobile home contracts

34:12

hey david i have an interesting question or at

34:14

least we are perplexed we purchased

34:16

a commercial property a for unit

34:19

short term rental in august of two thousand and twenty

34:21

and five year at just rate mortgage up four

34:23

percent the total loan was three hundred forty four

34:25

thousand that interest rates are on the rise

34:27

we're concerned about position and then this loan

34:30

balloons and a couple years by ran all the scenarios

34:32

and we decided stamper with five your arm but

34:34

looked into refinancing recently at a four and

34:36

a half for a tenure are

34:39

in hindsight we screwed up on the front and would not securing

34:41

ten your arm however here we are what

34:43

is your advice all right

34:45

so right just very mortgages are

34:47

not the worst thing ever i'm not actually someone

34:49

says arms bad

34:51

would i would say if you're dealing

34:54

with the deseret mortgages you need be a

34:56

position where you're not worried about the rate gonna

34:59

based on the tone of your question here

35:01

you are worried about the raid going up which

35:03

means you sydney gotten zazzle rates

35:05

in the first place kind of plane fast

35:07

and loose their iceman so here's my advice

35:09

you should refinance but not into

35:12

a ten year or four and half

35:14

percent rate you should refinance into six

35:16

straight now you can't do it is it as a cash

35:18

flow that ten year rate

35:21

is or ten year period of time is okay

35:23

but you're gonna have to be committed to saving the

35:25

castle from that property and put the side

35:27

the not living off of this you could

35:29

easily get yourself in jam again because

35:31

we don't know where rates are gonna be when that

35:33

ten year period of time ends

35:36

now for anyone else who's considering anyone adjustable

35:38

rate mortgage or adjustable he locked i'm typically

35:40

advising against that against general

35:43

and saying you to do the cash outlay fights

35:45

and that's because the said has come out and

35:47

said were gonna keep raising rates

35:49

they've let it be known rates are

35:51

going to going up unless something changes

35:53

that's the default so getting an adjustable

35:56

rate mortgage is not very wise if

35:58

you know rates are supposed to go and he

36:00

locks are adjustable rate mortgages so

36:02

in general if there's no reason to think

36:04

rates are going keep going up i may lean

36:06

more towards going that road i'm going to my

36:08

first one probably ever myself

36:10

but again it's like and eight one arm

36:13

so i have eight years where can lock

36:15

in a better interest rate or i can

36:17

save the money i can sell the house and i'm having

36:19

a ton equity walking into it plus i have eight

36:21

years of time for equity to grow the odds

36:23

of that going bad for me you're going to very small

36:25

but if rates are low and you can lock

36:28

him in on a thirty year fixed and just be done with

36:30

the

36:30

hi my name stacey and i'm really excited to from

36:32

it was confirmed for them to the

36:34

really appreciate everything that

36:36

you produce and put out in the world we

36:38

heard about from korean podcast and

36:41

everything robert kirkman for awhile and then

36:43

i saw that you were going to have henry on answering

36:45

questions with the of and your time

36:47

to sit at my question and really

36:49

appreciate your post real estate investing

36:52

and it definitely feels similar

36:54

to what my husband and i are creating

36:57

i call it a little bit unorthodox

36:59

real estate investors and

37:01

reason for that is we've got five

37:03

dollars in addition our primary residence

37:05

which we have paid off and fall and

37:09

we tend look at properties look little

37:11

bit different the real estate

37:13

investors in other words it's not always a hard

37:15

core number or are but

37:17

we do that because it works for us our

37:19

style and as

37:22

and result to that were always kind of strategizing

37:24

about plan about what happens

37:26

in and pretty good in our sylvanus

37:29

go path and so other

37:31

with an example we the third how into the

37:33

short term went oh are

37:35

about five months ago and we

37:37

did that and we bought prop that

37:39

with not a good solution destination

37:42

and but we didn't we feel

37:44

comfortable with it for two reasons one

37:48

we actually acquired this property

37:50

that is owed residents of office and had

37:52

previously been an office

37:54

for counseling office so we added

37:56

pumping haynes was short term rental

37:59

regulations we could you

38:01

know quickly and easily convert that back

38:03

to and office rental and

38:05

everything we get is rather than go out and spend

38:07

tens of thousands of dollars in purchase

38:09

a new furniture and there

38:12

are millions and all of that and

38:14

we went and bought actually

38:16

question we didn't bite you

38:18

flynn and since the one thing we did splurge on and

38:20

actresses but we without about used

38:22

furniture high quality stuff that we found

38:24

on whoop a partner

38:27

difficult for us because

38:29

we wanted to not spend ton of money

38:31

if we found out that this didn't work for

38:33

us ah the good news is it seems

38:35

be doing all right and we've been steadily

38:38

increasing our for teens

38:40

especially now that we're heading into the summer months

38:43

so my question for both of you today

38:45

as what are some really

38:47

creative ways to look at plan

38:49

b with real estate investors

38:51

especially because the markets the on a a

38:53

lot whether that short term short

38:57

term rental regulations or whether that's

38:59

whether in kharkiv read you ,

39:01

how can a real estate investor corporate

39:03

some these very creative plan b strategies

39:06

in see how they think about real estate investing

39:09

and so much for taking the question hope

39:12

to hear it on the podcast and again

39:14

thanks in both of you for all you do

39:16

thank for this they see i see really liked

39:18

this question because it's on the

39:20

front my mind all the time so

39:22

, getting at here folks is a

39:25

plan a is to buy a property

39:27

to use it for specific purpose but

39:29

something changes in the economy in the

39:31

market in the laws is it

39:33

okay to have okay to b or a plan

39:35

c and then plan d so

39:38

what a lot people doing is you're looking at properties

39:40

and say ooh this one would work really good for the sting

39:42

of a what has been happens yeah can't buy it and

39:44

or skip and onto the next one and that's i think

39:46

what states is getting out when she says peer

39:48

number crunchers they're just looking for what's

39:50

the highest are a whites that i can

39:52

get by stacy it sounds

39:54

like is looking at how do i play

39:56

defense a little bit here it may not be

39:58

the best return ever how do i cover

40:01

my downside in case something goes wrong

40:03

where i get much smaller return but i don't lose

40:05

property that i think

40:07

is actually wise actually wise that most

40:09

investors i come across the sea david teach

40:11

me how of s and real states

40:13

they're taken property their plugging numbers

40:15

in a spreadsheet usually to somebody else made

40:18

and they're trying to just do this over and

40:20

over and over until i get the highest are

40:22

why they possibly can pop out on spreadsheet

40:24

and go that's the when i mean by they're

40:27

not asking questions like how much time is

40:29

this gonna take how risky as as how likely

40:31

am i to hit that number what could go wrong at

40:33

this stage my career i tend almost

40:35

like defense first surrounded

40:37

and sing where's the most cashflow i to get i

40:40

say where's the best market i can buy in where

40:42

am i likely to be safe and then from

40:44

there how do i find the best opportunity

40:46

that i can to catholic

40:48

a couple plan b strategies that

40:50

i've put together for myself

40:53

was actually teaching my mastermind about start

40:55

to log on we got into this very topic the

40:58

, would be if it doesn't work at for

41:00

its size some best use which in many

41:02

cases is a short term rental least if people

41:04

vacation there there you turn it

41:06

into a long term mental so i want

41:08

the floor plan of the property to

41:10

be one where i have separate entrances

41:12

for upstairs and downstairs the have like

41:14

a deck that goes around upstairs i could

41:16

build stairs that's that's awesome if

41:18

it's a track home and there's no way to get

41:20

in the upstairs and as you enter the house and

41:22

go up the actual stairs that are inside

41:25

i probably don't like that for plan sexy

41:28

i wanna buy them in areas that areas in

41:30

general more business

41:32

friendly they're going to be

41:34

places that are sometimes conservative

41:36

minded by really what you want his business

41:38

minded they like tourism they light

41:41

business they want short term rentals

41:43

in their area because it brings in money

41:46

that

41:46

is a situation i enjoy because of

41:48

the politicians of the area are less likely

41:50

to outlaw short term rentals movie

41:53

mean bad spot or out

41:55

law rental property in

41:57

general another thing is can you combine

41:59

them city by

42:00

try place and rented out as a short

42:02

term rental rather than just as a long

42:04

term rental so if something goes wrong with

42:06

your short term rental the backup plan is

42:08

you make a long term rental another

42:10

what is all else fails to read it out by the

42:12

room is it is close enough

42:14

to businesses that people are

42:16

going to rent a room to live there if you biden

42:19

the middle of nowhere thinking it's risk it's

42:21

less risky because the price is lower

42:23

but there's no demand for anyone to write your space

42:26

you're actually taking more risk so

42:28

risk liked the bigger properties with more bedrooms

42:31

and more bathrooms because i know all

42:33

were what happens if everyone stopped traveling

42:35

an accent but this thing on air b

42:37

b or v rbl well all right

42:39

out bedrooms and i'll make best to their

42:41

and or whether the store i'm always

42:43

looking for that different zoning options like you

42:45

mentioned that can be a good idea to but

42:47

i think something that people severely underestimate

42:50

add something that on the david greens him i'm constantly

42:52

preaching to our clients is the floor

42:54

plan of the property not just

42:56

the price not just the area does

42:58

the floor plan worked for tenants if

43:00

you're trying to get several people in property

43:02

that has one and half bathrooms and

43:04

every ten it has to share the same

43:07

sour that's not gonna work if

43:09

you didn't make sure that there's enough parking the have

43:11

lot of people in that house and when times

43:13

that's not gonna work you have to actually look

43:15

at floor plans that are conducive to what

43:17

you want do cc big you for bringing

43:19

up this whole plant be idea which i think

43:21

is becoming much more importance with that

43:24

looming questions that growing in everyone's mind

43:26

about what direction economy the

43:28

questions from sad hey there

43:31

first and foremost think you to david the

43:33

other bp house and the guess for going my knowledge

43:36

and real seen investing i've been looking for that

43:38

niche that will be my medium to success

43:41

david frequently says to turn your learning to

43:43

action he also says not make

43:45

the jump without reserves i respect their is

43:47

not defensive line or amount because every

43:49

circumstances difference but what

43:51

advice or goal can be offered to how much

43:53

of a reserve should be played to business plan

43:55

before i get into a deal i am ready to

43:57

get my white belt thank you again

44:00

right sad so here's what i would say in

44:02

general

44:03

six months of mortgage payments

44:05

utility payments everything you're gonna have to have

44:07

to run that house is a good amount to keep

44:09

reserves to be safe now

44:12

i am okay with it becoming less

44:14

than six months if you're person that lives

44:16

beneath your me

44:17

the here's what that means if you're saving

44:20

zero money every month six months

44:22

is the minimum that i would say somebody should keep

44:24

reserved for property but what if

44:26

you're saving five grand month and

44:28

six months of reserves is forty thousand

44:30

dollars will if you're reserves drop

44:32

down to twenty five or thirty thousand but you

44:34

can save five grand month from money

44:36

this company from work year okay to

44:38

let those reserves come little bit less than somebody

44:41

who is living paycheck to paycheck and doesn't

44:43

have the ability to earn more into

44:46

case in point when i started investing was police

44:48

officer and one the ways that i was able get

44:50

over my fear of not having enough money

44:52

to make the payments was that i knew

44:54

overtime was basically unlimited nobody wanted

44:56

to work as police officer so we were always understaffed

44:59

and knew if i had vacancies a bigger

45:01

para wasn't expecting some cap acts

45:03

of vets i could just go work overtime

45:05

the next several weeks and save up as much money's

45:07

i needed so i was very confident know

45:10

i have i have mine just and he's when got me

45:12

to jujitsu

45:13

well he's one connected me with my jujitsu

45:15

academy adjusted is going

45:17

to be getting a position as position

45:19

as fighting captain said though he's getting

45:22

raise i'm getting ready sell his house for him

45:24

and help move somewhere else though he's getting

45:26

raise his

45:27

overtime opportunities are going to be shrinking

45:30

which means his ability to generate more money

45:32

if he media is going down so

45:34

we're actually going more conservative on

45:36

the house he goes to buy it's because it

45:38

doesn't have a backup plan of earning more income if

45:40

something goes wrong so also chad

45:42

take that into consideration six months

45:44

as a baseline but if you can make money

45:46

save money you could go below that if

45:48

you can't you want be there or more

45:51

all right that is or so for today

45:53

i want thank you all for being here with

45:55

me and sharing this time as well

45:57

as getting erosive investing education

45:59

from

46:00

thats bigger pockets and me in particular

46:02

this is blast to do if youd

46:04

be so kind please submit me your questions

46:06

bigger pockets dot com slash david

46:09

we cant make the shows if we dont have you guys

46:11

asking questions also if

46:13

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46:15

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46:17

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46:19

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46:21

it to bigger pockets dot com slash david and

46:23

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46:25

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46:28

green twenty for if you have to ask question

46:30

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46:32

thats all we have for today please check

46:34

out one of our other videos and also you