EYL #12 The Marathon Continues.

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All right, guys, welcome back. We have another monumental episode today, put a lot of pressure Episode twelve. First of all, thank you guys for your support. Our growth has been tremendous. You know we're in the top ten percent of all podcasts audio in the world after twelve weeks. So you know, it's encouraging because you know, the content that we're putting out as educational, so it's good to see people gravitating towards that. So thank you guys for your support and

Made a list of people we wanted to meet and we're doing the same work and we're on the same path, and he was at the top of our list. And to see the news what happened Sunday, it was just it hit hard.

Ye, senseless, senseless act of violence that just affected so many different people. And as you said, I mean, Nipsey Hustle was somebody that we were pretty confident that we were going to get a conversation with him. We just I just felt it because that was his economic empowerment. That's what he was about, Like you know what I mean. So yeah, man, it's just it's just a very tragic and sad situation. Like you said, senseless, just a senseless act of violence in.

Peace came sad, sad loss for the world, for the culture. He was definitely out there doing what he had to do to empower us all and now we just got to take that baton and continue to run with it.

I think that was one of the most uplifting things I saw.

It was like somebody had DM's us and it was like Nipsey would be proud of your work. And I was like, wow, because I don't. I mean, I didn't even speak to you. The first beginning of the week. I just couldn't talk. I was just completely out of it. But when I read that, like he would be proud of us, continue to work and the marathon continues, I was like, let's do it.

We're gonna carry this.

The marathon continues for sure. So this this show is actually dedicated to Nipsey, and one of the things that he was very passionate about. He was passionate about a lot of things, but economic development in his community, buying black his community, and investing in real estate like he was. He was big on real estate. He was on Forbes. Forbes covered him as far as his revill estate deals. And he had just brought the strip mall in his

I appreciate the love, I appreciate the hospitality. Like you guys said, I'm on to our right now. It's been We just came back from Miami.

What cities have you been to so far?

So far?

New Jersey, New York, Well, Atlantic City, Queens. We just came back from Miami. Now we head into Detroit on for twenty then we got Atlanta for twenty seven. Then we're back in New Jersey five nineteen.

Then June.

He didn't announce yet, so I'm not gonna know. We we got something going on in June, July, August, you know. So we're just traveling around and I'm probably gonna put together my own workshop again, part two of the Generational Wealth Workshop, so and Juling.

I'm working on those details now.

So it's just it's been busy, man, and on top of it.

Yeah, no, this is this is nothing.

Man.

I love what you guys are doing. I'm excited to be a part of this. And listen, I'm humbled to be a part of this because you guys could have picked anybody, but you guys picked me to come in and talk about a subject that I love.

So I'm ready, man. That's the piece the Nipsey again.

Man.

We're going to dedicate this episode to him, and hopefully we may him proud with the information we want to get out to the people.

All Right, So now we're going to go into an interesting story that's been in the news recently about fifty Curtis.

Jackson, Queens get the money?

Are you from queens?

From Queens? Brooklyn and Queens? But I claim queens.

Okay, okay, fifty yeah, fifty, We like fifty cent. He's actually I think he's more entertaining as an entertainer at this point than a rap. Absolutely, he's hilarious. It's actually really yeah, well, I'm he gives not trying classic. Even before that, the mixtape raxtape change changed the game.

He changed the game with the next.

Day, so all right, So he he brought a house. He put Mike Tyson's house in two thousand Can we.

Even clo the house?

We got to state state that's like, I don't even know if you can call that state.

That's state compound. That's a compound. I think it's the biggest a state compound house on the East coast. Has fifty bedrooms and nineteen bathrooms. Crazy, and it's fifty thousand square feet fitting The address was I think fifty something. So it's ironic.

It works.

So he brought it in two thousand and three for Mike Tyson's ex wife for four point one million dollars and he he turned it into.

It was like a Playboy Mansion times ten.

Yeah, he put it. He put a stripper pole poles, studio, a grothel. You gotta love it.

Yeah, he had a casual atrium in there.

This it wastaou basketball courts, a studio like you said, a club.

It was. It was called club.

Damn. That was right at the tip of my head.

Fifty I think, no, no, no, no, something else.

It was like the sound system cost one hundred thousands when he went he went in.

He puts six million dollars into it in addition from the four million that he actually paid for. So he's ten million.

Total ten million.

And he realizes that I don't really want the house anymore. But therest thing about the house is that it's in Connecticut. It's in the middle of nowhere, in like a middle class neighborhood, right yeah, And it's like five times bigger than any other house in the neighborhood.

It's bigger than most hotels.

It's speaking in five times bigger than probably any house on the East Coast.

So now he decides he wants to sell it. I think it's on the market for like ten years.

Two thousand and seven, he decides to sell it. He puts it he listed for eighteen point five million.

Yeah, try again. No, nobody's buying it for eighteen point five million. So he just recently sold it for two million.

Yeah, two point nine two.

Point nine million, man, so that's like a seventy nine percent loss.

The headline was like.

Asking and like a seventy nine percent from total where he's all in, Yeah, And it's so crazy because it's like, hey, I mean the grand scheme of things, if you really think about it, especially in our area, two point nine million is not a lot of money for fifty bedrooms in nineteen you really think, you really think about that, that's obtainable, like that.

It's not too far fast, No, it's you got six bedroom homes going for that price.

It's like, it's crazy that it costs that much, and then it's also crazy that it's appreciated that much. So like, what's the takeaway here?

Like, oh man, there's so many takeaways with the story, good and bad.

You know.

The first thing that stands out my head being in the business is over improving the house for neighborhood, right, you know, I do a lot of renovation loans. So what I try to tell people is don't create the white elephant in your neighborhood because you'll never get that money back.

You'll actually lose.

And I think this is a prime example of having that white elephant and you.

Want to get a story in a white elephant, like yeah, yeah, yeah, So like the white elephant. Really it was a gift that was given to a king or somebody of that statue or emperor, and it was a beautiful gift because it was rare. You could never find these things, right, But after he got it, he realized all the burdens that came along with it. What do you beat this thing? How do we make sure that the stay's healthy? And it just becomes something that is there that has no use.

Nothing to use, greased another day.

And that's kind of what happened in this situation.

Right.

So that's the biggest takeaway that I got off off of it. Being in the businesses, just don't over improve the house because you never know what the market is going to do. You know, when he made that six million dollar investment of renovating the home, it probably was

So at that time it probably was a great idea.

But Tom told that it wasn't a great idea.

So that's one of the major things that I got out of it.

That he took such a big loss that we see but on paper when it comes to tax strategies and everything like that, Listen, fifty is smart. You know he donated the proceeds to charity. Tax strategy, right, I'm all on with helping and doing he has to do. So I'm sure over the last twelve years he's been able to write off a lot of these losses and will continue the.

Probably he wasn't even living at the residents.

Yeah, and one of the things he was trying to do was make it a part of his gun foundation where kids could go as a summer camper treat. And I think like off camper we were talking about, like, oh, so he probably didn't even buy this as Curtis Jackson.

Oh, definitely, probably not right. It's probably was in one of his many businesses names. So you know, that's when you see these headlines, right, it's eye popping, you know, eighty four percent loss. But do we really know how much he really lost or did he really lose in this entire deal.

Where you break down from a tax perspective too.

But the one thing is for sure he overinvested into the property.

And there's no denying that, right.

You know, you purchased it for four point one, you put in six, you sold it for.

Two point nine.

You lost, took an L when it comes to that, But on paper, he probably didn't take as big of a of an l that the headlines and the papers are making it out too.

And then you got to keep it classy too. It's like, yeah, it's like putting rims on Rose Royce, like, yeah, something you put a ship. You can't put a ship in Connecticut. I don't think there's too.

Many people saying listen, man, listen, I'm not even going to you know, when you when you're in his lifestyle and in his business.

No, no, it's good for him. But if you ever done about reselling but for resell.

But but that's that's you know again, when you renovating your home, you got to be careful what you're putting in there because your taste may not be.

The next You gotta think the person that's going to buy it next. Yeah, exactly.

If you always got to be thinking about that resell, that reselling. Maybe that's something that he never thought that he would ever sell the property.

He probably thought he would always keep it right when.

He was putting those murals up of himself.

Putting the pros up, doing anything that into the property.

He probably never thought like, I'm gonna sell this in ten years or twelve years.

Probably thought it was going to be his compound forever.

But you know, life changes, right, and that's the most important thing about real estate is you never know, you know, life moves and whatever that action. It needs to move and the market doesn't care about the tripper poles.

The person, the person who bought the compound. He said that he's going to invest money to renovated too.

Yeah.

I read that this morning that he's going to invest millions of dollars into the property. So for me, this is this is going this is like anover end the story. I think that we're going to be speaking about for years to come because who knows what type of foolery that he's going to in the house.

It's that there's something about the house because before Mike Tyson had it, the Giant and the general who owned it, Yeah, like I think.

He went to prison with fraud fraud, yeah.

And then Mike Tyson like we probably should maybe just turn that into a motel.

I mean, listen, at this point, it's probably fitting for a hotel.

Right, yeah, but it's just it's in like the middle.

It's armorting Connecticut, which is I mean, if you live in a try to state, that's not close to here, which is probably why he wasn't staying there, Like he's in New York, is in LA It's like two hour drive, Like if you've ever driven through Connecticut. It's like, yeah, bro, you're looking at trees for hours hours.

But I mean fifty wasn't driving, it was taking hell like so you know, it's just a different lifestyle.

But you know that house is definitely uh.

Like a white elephant, like like you said, And that could be a lesson for anyone who's buying real estate. Don't over improve, don't put too much money because you never know how the neighborhood is going to change in the in the next couple of years. So if anybody gonna learn anything from this, that's what we need to learn from it. Don't over improve your property.

Shout out to fifty, shout out.

I love what he's doing everything.

Yeah he got some he got some new series.

Is that that white elephant? I don't know if that actually if there's a white elephant, Like, is that just like one of those make belief stories though, But I'm just thinking about it. What makes a white elephant harder to feed than a regular elephant?

No, because it's it's it's it's like no, no, no, it was rare.

So it was like it's like the.

Unicorn there, It's like, yo, do they eat the regular food or you know, what I'm saying, like it was under that premise, like how do.

I treat this elephant doesn't eat regular I don't, I don't know, I never had one.

I'm like, my thing is like a white elephant doesn't even to be around the story.

You know what I'm saying.

I'm saying, it's not real story. No, no, that was like a real story.

That's like like a unicorn, Like we've never seen a unicorn, but like how do you.

Feed a unicorn?

Santa Claus, I've never seen Santa.

Yeah, you thought like it was it was a problem.

I thought it's a real story.

No, no, no, no, no, no, no, no.

Shots white elephants in.

The world, Like remember in Greece, Remember did you post that? What in Greece where they have like Athens? What it looks like now they have the Olympics in twenty ten.

You know what I'm saying, Like what it like?

Have you seen what it looks like?

Now?

It's ridiculous, completely run down.

They can't waste the money, wasted money just to have this one event, like these things are white out.

The same things gonna happen in real Like some places should not have.

The Olympics they built the stadium in the rainforest. Wow.

And when they try to when they try to have events, it was the whole city flooded. Nobody can get to the events. It's like, all right, you spent eighty million dollars to build the state, probably more now we have.

No use for it because you can't even play an abandoned stadium in the rainforest.

It's ridiculous.

They were like, oh, we'll have club teams come, but they a club team's not going. Some of these club teams can't put one hundred thousand.

People in there.

They can't afford to go to the games. The environment you're building.

It is terrible, man, Yeah, but it is what it is. Well, there you have it.

We're gonna talk today about how to get really real estate one on one. So for an average person that doesn't come from, you know, a fluent, affluent family and low socio economic environment, how does someone get into real estate?

Like what would be the first step?

Oh? Man, The first step, personally, I think is mindset.

You got to make the decision. I think that's numero uno, right. But as far as financing, you need to get pre approved, you need to know exactly what you can qualify for. There's several different loans out there. So let's speak to the first time home buyer right now. What I try to coach all my first time home buyers is, you know, most people want to go ahead and go to White Planes or go to Long Island and buy the nice single family home with the white pick offense and this,

You gotta do. What you gotta do. You got to have the money for it though, right.

But what I try to encourage all my first time home buy is, if you don't have a need for the certain school district, or if you don't have, you know, children that's going to junior high school or high school, then you should always start off with a multi family, especially if you know you're looking to get into real estate investment. You know at some point in your life, start off with a multi family anywhere between two to

A half percent as a down payment, which is a terrific program.

So three and a half would be that's pretty small percentage.

Yeah, as opposed to if I had to just outright put what is it normally twenty percent or no?

No, So you have FHA that allows you to put down three and a half percent, and also conventional loans allow you to put down a US three percent, but you have to qualify.

You have to be a certain income restrictions.

If you're buying multi families, you have the you know white planes, the income restriction is probably ninety six thousand, So if you exceed that, then you won't qualify for that three percent down on a multi family. Then you'll probably have to put down as fifteen percent because it's.

Gonna be a primary residence.

But FHA is always a good tool because no matter it does I have any income restrictions, as long as you're within the county's loan limits, then you can and you can credit an income qualify which minimum credit scores a five to eighty for FHA loans, were putting down as little as three and a half percent. Buy that multifamily and you can live in it for twelve months and then move out of it, and then you can writ the entire the entire place out and now you

So each county has a set loan limits.

That you said, yeah, so faha has Every county is different, right, So we're in like five boroughs west Chester, Long Island.

So up to a fourth family, we can go to one point three non seven million.

Every county in America, every county in America. So if you're you know, your audience is probably all over the place, right, So if you want to know what your county loan limit is, just you can google it again. You know, if you're living in Kentucky, you can google, you know, fah loan limits for Kentucky or whatever counties in Kentucky.

So that's why.

So that's interesting because yeah, so that's interesting that you say that your first home should be a multi family.

You should be a multi family.

A lot of people have the reverse mindset where they want to get the picket white fins as their first home, and then if they want to get like an investment property, then they'll look at multi family.

Yeah.

But see that's where they screw themselves, right, because now when you go ahead and you do that one family first and you go do the multi family second, now you gotta put down twenty five percent. Now unless you have twenty five percent plus closing costs, which is probably you're gonna probably spend around thirty percent for that transaction. Then guess what you just screwed yourself. Now it's gonna it's gonna be harder for you to get into that

Right.

And if once you say investment property, you automatically think twenty five percent down payment, you say.

Difference, that's a huge difference.

And especially here and where we are, you know that can be a couple hundred grand depending on that sales price. But if you go ahead and do multi family first minimum down payment, twelve months, you move out, move into your single family.

Now you have an asset that's going to pay for itself and probably pay.

For your one family or a portion of that one family. Right now, you created some sort of cash flow I have. I've had clients move from four family to a two family you know, and still was able to use minimum down payments. Now, if you use an FAHA loan, you can't go ahead move out of that four family property FAHA and then going to the two family FAHA because FAHA changed their rules or a couple of years ago.

You can't have two FAHA loans at the same time now, right.

But you could use it again.

What your loan if you reach what.

I tell everybody is this right, you buy that four family or that multi family, you stay in there, you refinance it, you get out of the FAH loan, and you go into a conventional mortgage. Right, probably try to pull some equity out of that home so that way, now you can use that equity as a down.

Payment for your new property. Now you're refinancing as.

A primary primary residence because you're still technically living in there, but your intent is obviously at some point to move out of it. Now you're taking that equity. You have a conventional loan on it. Now, now you're going to buy your one family. Great, you're gonna go move in that one family. Now you can use FAHA for that one family because this four family or multi family is now in a conventional mortgage, and you took the equity out of.

There to help you purchase that one family.

And now your tenants are not only paying for this property, now they're gonna help pay for the property depending on the rentals and cash flow of that proper. Because it's all about strategy at the end of the day, and most people don't lead with strategy. Most people lead with emotion. And this is business at the end of the day. Like you know, I try to coach all my my buyers think business. I don't care if you're going to live there. I don't care about any of that stuff.

Men live, women live. Numbers don't at the end of the day.

And if you're telling me your goals are to invest in are to invest in real estate, then you need to think like an investor. Every first time home buyer should be thinking like an investor. Why go buy the flip? Why when there's programs out there for the first time home buy like an f h A two or three k long or Fanny Made Homestyle loan where you can get renovation and your mortgage money.

All in one, all in one loan. So why not going by look, we spoke about Envy and Cason.

These guys are not buying the flip, right, They're going ahead and they're buying at the foreclosure auctions.

They're buying short sales.

They buy the worst house in the best the best areas that they can and they're putting that money into it and now they're making their roy Why can't every first time home buy I think the same way like the investor. Why does the nbs and the seasons of the world need to make all the money. Why can't the first time home buy have that same strategy and make the same returns. But you're gonna live in it for a year, two years, three years, whatever the case

So you would encourage anybody to go into buying a home as an investment. Like, even if somebody doesn't necessarily look at themselves a real estate investor, I guess they are a real estate investor by absolutely buying home your investor investment. Whether you think you're investor or not, you're investment.

You're investing or not.

So some people will tell you out there that your primary residence or a single family home is not an investment because it doesn't generate cash flow, right, which is true. But to me, I don't think that's one hundred percent trul because you're looking at that equity, right. That equity is what that first time home buyer should be paying attention to. And when that equity gets to a certain position, you need to thing it. You need to do something

I'm like, what are you doing?

You need to take that money and do something with it because if the market corrects itself, which it will at some point, now, you're going to kick yourself that.

You didn't jump in the game. Take earners, what's up?

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Get money to invest in these opportunities, zones right and build that generational well for yourself. Because the market doesn't care about what's going on on the market is going to do what the market wants to do. So what I try to coach all my buyers, my sellers, my current homeowners whoever, don't let equity sit there because it's not guaranteed.

You got to use it.

If you don't use it, then it's not it's nothing. It's monopoly money that's rue. Don't the single family home is great, and I don't have nothing against the single family home, but I think the strategy moving forward should be multi fans. The first single families laid it down the road because you can always buy a single family home. There's never going to be a shortage of that. Look, what's happening in housing is expensive. Rents are going up.

I think it goes back to where our guests last week talked about as far as a lot of times we care about how we're perceived exactly, and it's like, Okay, well how would I look living in a three family home. I'd rather have the white picket fence with your back yard and.

All that well, with the Mercedes outside.

When you look at it from a financial standpoint, from a lot of different reasons, it does make sense.

Oh absolutely. And the piggyback off of episode eleven, which.

Was a phenomenal, phenomenal, phenomenal phenomenal episode. So if you guys haven't watched it eleven, you need to watch that before you watch this all the other ten two.

But episode eleven was fire.

Right, So what he brought up a great point, right, mixed use properties, which mixed use properties are.

Common where we are in New York.

You can use faha long to purchase a mixed use property, which a lot of people don't know and put down during a half percent as long as fifty one percent of that mixed use is residential. So you can go ahead and buy that mixed use that may have a storefront,

Now living for free.

His business is for free, and the mortgage is being paid off, and you can use the two or three k long to renovate it.

So you can go buy the piece of shit mixed use property and use.

That renovation money is to fix it up, clean it up and open up a business or rent it out to another business, own up the commercial aspect of it. And now commercial rents are much higher than residential rents. So again, living in for one year, now you move out. Now you have a commercial property all under three and a half under an FHA loan with three and a half per.

Cent down plus your closing costs.

You got to know the game, man, You gotta know it's all about It's all about strategy. And most people, especially listen, we're in the age of the business owner the entrepreneur.

Right.

Most people don't think you still need a brick and mortar, but some businesses you need a brick and mortar, right, depending on if you're in a service industry or whatever the case may be. If you're in retail, if you want to open up a store or restaurant, like you said, it's one of the toughest businesses because.

The overhead right and rent is a big thing.

But if you have a mixed use property and you want to open up a restaurant, why not use that as your primary residents also for at least twelve months. For that twelve month sacrifice, get the loan living there because you always can move out. And now you have a business that's basically in there for free because you let so you get you know, you're killing two birds

So it's all about strategy.

All right.

So now we're going it's not all good in real estate. It's never always a dangerous Now we're going we're going to explain that how things can go wrong, all right. So, as I said, it's never all good in anything in life.

Right.

So real estate is something that's very popular, very trendy right now, and it's very it has this stigma I think of everybody thinks they're just gonna get rich overnight, right, and people don't know it's like any business. You know, when you go into business without a plan, your destined to faiel. Right, So if you plan to be a real estate investor. And as you said, whether you think you're investor or not, if you're buying a home, you're

Correct.

Right, So this dudes and don'ts involve, right?

Absolutely?

Can you just talk about some dudes and don'ts in game?

Yeah, there's tons of them. Right, But if your first time home by one of the don'ts I tell people is especially if you're in the application process, you found the house, you're in contract, don't open new debt, don't buy your Mercedes bends before you go to closing. Don't change your jobs, you know, don't do something that would impact you in a negative way to turn your approval

Most people like they don't realize, Like when you apply for a card, they do a credit check, then they have to put your credit.

That they don't realize.

When you go for a car, they may pull your credit with ten other banks to shop right, to see what's the best deal for that for the auto finance company, not for you.

As the consumer.

Right now, that affects your credit score, affects your.

Credit card, brings you down.

I mean, I've had situations where people applied and purchase Mercedes Benz a week before closing. I've had people who got cold credit cards just because it was colds box involved and.

Savings.

You know what I'm saying, Well, I'm like, what are you doing? You couldn't wait to get the bed sees the house yet, so you don't. What I try to tell people is this, when you're in contract, you don't own that house just because you're in contract, just because you have a loan commitment.

Do not get happy.

Do not make any changes that can affect you in a negative way, because you can get declined just as quick as you got to prove right, and the underwriters are always looking for a reason to decline you. So you have to be squeaky clean. Don't be moving money around. That's another big thing.

Do not move money around.

Keep your money in one account. Stop doing your so suits and putting here and doing this and doing that.

You know what I'm saying, don't do it.

Don't put the mattress money in there, No like leave your accounts alone, because now we start seeing money move around, that's red flags. Now we have to document, We have to see where this money is coming from. If you can't document that money, then we can't use it right, and that can blow up your deal too.

So the don'ts is it's just keep still, you know, keep still, relaxed.

You're almost at the closing table, and when you close, you can do whatever the hell you want to do.

Right.

Another one of the don'ts I would say for first time investors, right, stop thinking you don't need money.

You need money right.

If you're looking to wholesale real estate, then maybe you don't need money right because you're signing contracts. But if you're looking to do buy and flips, or if you're looking to do buy and holds, you're going to need capital.

Right.

There's many ways you can get capital. I mean, you spoke about it at my workshop. You can do self directed iraise, you can borrow from your four one K, you you can raise capital with a group of friends. What I'm starting to see right now is becoming more popular. But people are co owning properties together, you know, moving into multi families working together.

You know, lot of different cultures co own, right.

But can you talk about that collaboration because I'm talking about collaboration in business absolutely, actually last week so now, But collaboration and real estate, yeah, something that is very key, very important leverage. Can you just talk about that. Yeah?

Absolutely.

Our collaboration is greater than competition. I speak about this often. That's why we're here right now, because we're collaborating because it doesn't make sense to compete when we all have something that we could bring to the table. So if your first time home buyer, let's just say your brother is a first time home buy and you both want to be in that same area, why go by two

With real estate investing, you don't need to be one hundred percent owner.

I think that's the biggest misconception that people think, like, if you're going to we all can we can collaborate and create a business structure a joint venture business structure.

And put our money up.

And it doesn't have to be equal, right, as long as it egals to one hundred percent at the end of the day, that's all that matters. You can be eighty percent own and we can both have ten percent ownership, right because we're bringing something to the table, but that would be our portion of the net rental income or of the proceeds after sale, eighty percent of you because you're bringing the capitol, right, But we may be the operators,

And you said something important, you said coachally, you're not seeing that happen.

No, it doesn't happen as the cultures we have ego.

Yeah, from a client based standpoint, what are you seeing out there?

Like?

Why what's holding us back?

We hold ourselves back, you know what I'm saying, Like we want to be the top shotter, we want to be the midln This is mind right. We have that ego, that mentality, that that fucking sense of entitlement that we deserve everything under the blue.

Sun, which we do.

But if you ain't working hard towards it, then why you have this sense of entitlement? For number one, But I don't know why we don't collaborate more. It's sad that I see a lot of people in our community are not collaborating. But also on the flip side, when I'm starting to notice the trend, especially if you look at you know, what they call black Twitter, black social media, You're starting to see the uplifting. You're starting to see

So I think that, I mean, that's a person story for me, like that literally is my mouth model right now. Like I own a home with my dad, and it's easier for us because obviously it lessens a burden on me, but it also puts me in a position that whereas you know, they're older in age, it's easy for me to take care of Rather than having them grow in age and having them put them in or having them.

Go into a home, they're here, I can take care of them and it works.

No, I think it's I think it's a it's a perfect situation for you to co own. I know, someone like myself.

When I've purchased my first home thirteen fourteen years ago, I didn't want to live with nobody.

You kidding me?

Forgot to have nobody's going to live with me? Right, But now as I've grown older and I'm matured, it's more so like, you know what, that's the best way to do it, because people just can't afford to live on their own.

No more.

People are struggling. People are living paycheck to paycheck. In New York, if you're making one hundred k, you're broke. I'm starting to see a lot more in our community where people are co on it because people just don't they don't have that the resources. You know, we qualify people off your gross income, right, but you live your life off your net income, and if you make one hundred k gross, that's really like fifty five sixty thousand net.

Depend on what state, right, depending on taxes or what state you're in. Right.

But if you're talking about thirty five forty percent, if you're making that type of money, I mean, that's what we're qualify with, confie off.

That bigger number.

So for me, it's like if you can barely qualify, you're add a max debt to income ratio of gross income. You really can't afford it because you're not taking consideration your your auto insurance, your childcare, you know, things of that nature that don't report on your credit reports. So you have to be smart, is what the message that I'm preaching the people now is like, you know, be

And then one of the things before we before we finish, is that you had mentioned before off camera that it's important to have a strategy. Absolutely, like you go from like two to three to four. Can you just kind of explain that?

Yeah, I mean, listen, everything is strategy, no matter your first time, first time home buyer, you buy your second home, move up home, you got to have a strategy.

Right. For tax purposes, you need a tax strategy.

That's why I speak a lot about tax strategy, insurance strategies.

We've had that conversation several times.

So what I try to tell.

People, go go down right four three to one, because if you do it properly, you will be able to use minimum downpay for four units four units, three unit, two units.

So the first home should be a four unit home, correct. Then you move out of that, you get the three unit home, keep the you keep them, but you keep keeping it the whole time. Keeping. Then you go from three to two. Yeah, and then now you can buy your dream home. Now you can buy your dream homes. Yeah, that's paying for it.

You got to drink about it, right, you just accumulated probably what's that seven, nine, nine doors in a matter of a couple of years. So if you're making five hundred dollars profit a door, you know, now your single family dream home is paid for.

It's really your dream home.

It's not like it's not what I can afford right now. It's like we sacrifice for the first five years of our real estate journey, right and we went multi families and moved our way down, and we did it strategically. We're not sitting here buying in the best neighborhood when we're buying our multis.

We're buying areas that.

We can feel comfortable and safe and living for a year, and then we're moving out and moving into a little bit step up or neighborhood, but going down the units. Because from an underwriting perspective, it has to make sense for you moving from one multi family to another multi family. You can't buy a four family or three family on the same block and say moving from one house to another, right, that doesn't make it.

So that's a play like to move to a decent neighborhood and just keep moving up in neighborhoods, just keep moving. That's another thing too, parent that like, I want to move in the best possible neighborhood right away where my kid is like one years old because I went to school district. But one year is not going to make that big difference, right, not at all.

It's not gonna start to five.

Listen, the kid is not going to start the five. I have a four year old, right, and she's she'll be five this year. She's going to kindergarten, right. I act her every day with Sha Larne in school, and the answer changes every single day, right, like, and then sometimes and I have nothing to do with school, like okay, maybe, right, So you got to really think about it.

Why are you going to go to that best school district?

And then the best school district in our areas come with fifteen to twenty thousand and property taxes, right and now with the new tax laws, you can only ride off ten thousand.

You can't ride off the whole amount.

The more so everything has to be strategy and you have to know your tax laws and you have to keep up with it, right, So why go to that best neighborhood if you really don't need the school district? Right now, why don't you go to the okay neighborhood that you're safe in. Get the multifamily because while your child is growing, you could be growing too, but in your real estate portfolio. And now when it's time, maybe I don't even think kindergarten you need to be in the best school district.

That's just my opinion.

Maybe not even until they get to you know, sixth or seventh grade is when their brains really start retaining stuff. In my opinion is now you probably want to go to that best school district, and then by that time, you probably accumulated you know, three four assets.

That now can help pay for them.

It's the same like with people in private school. A lot of time people will send their private kids to private school in like middle school because they only pay the price of private school in second grade. Yeah, so they save, and then by the time they get to like sixth grade, seventh grade, now they put their kids in private sche.

And I have folks that love private school right versus public grade.

But then why you're going to buy the house that comes with fifteen thousand taxes if you're not going to send the prother because the majority of your taxes are school taxes. You know, what I'm saying, so like, why are you going to pay out of the fifteen grand, probably ten grand is going to the school, but you're still paying probably ten fifteen k a year in tuition at the same time, So and you can't write it all off no more.

So why do it?

Right?

It doesn't make any sense. Even if you go with the Star program. The Stock program is only going to save you a couple of dollars for those who don't know what start. The Star program saves you on school taxes, right. It used to come off the gross on your taxes. Now they send you a check at the end of the year. So it doesn't really help you. During the course of the year, you get reimbursed or refunded. That's that's savings. But that's the savings is only like two grands.

So just be smart, move a strategy.

Start with rental properties first, because the rental properties can pay for your asset. Like dj Envy ncs of both say at their seminos, right, which I love that they say it.

You know Mv's flashy like he love his cars.

Right.

We all know that if you follow him, he's always buying some Rose Royce or something. But he said flat out, I don't buy this unless I have an asset that can pay for it.

So I'm not paying for it. I'm paying for the asset.

Assets of reliabilities right, shameless assets over liabilities people, right, But he's buying the asset to pay for the Rose Royce. You know, we have that same opportunity. You know these guys are part of the one percent club. Great, we all have that ability to do the same thing even if we're not part of the one percent.

We can develop the one percent mentality. That's all we need. So that's when you ask me, what do we first start? Right here? The mentalit is the first place that we need to start develop that one percent mentality, develop a strong team, develop your one percent dream team.

You know you need guys like me.

You need guys like Shall, You need financial planning, you need to understand tax planning. You need all of these these these key team players to guide you to know your overall strategy. Because if you just go to in my business, what I like to call them order takers. You know, it's like going to McDonald's. You want fries with that right, if you go to a regular loan office, so they're not asking you questions.

They're just thinking to.

Get you preapproved today, to buy that house today, but they're not trying to gather the long term, your long term goals. So when someone comes to me, I'm asking these questions because I want to know what who are you number one?

And what do you want to deal with your life?

Because if you tell me, hey, I want to buy this house, but then at the same time you say I want in basketball, you're contradicting yourself.

You got to kind of pick your poison and figure out what's the best route. And I can only tell you my opinion, my advice. This is what you qualify for. I'm gonna lead you to the water. But it's up to you to drink.

At the end of the day, we want to thank you for coming in. Man, that was I hope you guys really once again took notes. Yeah, I hope you guys really took notes. Because this is just like business. You know, real estate is something this is actually probably even more relevant than business because everybody doesn't inspire to

Even I'm going to cut your wall.

But even if you're a rental you still should be buying right Like why and especially with the millennials, like I hear a lot of this online.

Millennials don't want to buy homes.

They just want to rent because they don't feel like they want to get tagged and tied down to a property. But why not still invest, you know, still buy property, still buy real estate, and you can because it's nothing wrong with renting. You know, there's a lot of people on my industry that try to say, compare rent versus owner, which I get the logic, but there's nothing wrong with being a renter, right, it's a purpose. You know, some people you have to be mature to handle home ownership.

Right?

You know, it's a lot of responses that it takes a search level of maturity to handle home ownership. So if you're not mature enough and you need to rent, why not start investing into real estate and start small, staying your lane. You don't have to keep up with, you know, the superstar investors that are out there buying ten properties a week.

You know, stay your lane, whether you buy one home a year or one a month, whatever your lane is.

Staying this the fact. But yeah, so once again, thank you for coming. And also it's important too, as you said, I like what you said as far as putting together a team and just having resources a lot of time, we feel like we want to do everything ourselves. And like me, I'm a big proponent, Like I stay in my lane, right, So I'm I'm a financial visor. I talk about finance, but I don't talk about everything to do with finance. So that's why we brought you in

Listen on YouTube MG the Mortgage Guy on Instagram Matt g Underscore home Loans. Catch me there on Facebook or LinkedIn just my name Matthew Garland, Matthew with two teas. But if you have any questions are concerned, you can shoot me a DM on Instagram.

I respond. I try to respond to all the d ms.

All you can catch me on one of these dates with dj NB and Caason on the real estate seminars.

But I'm around man, just some high mean and let's work.

I appreciate Troy anything.

Well, I'm gonna end where we started just a quote from Nip the Great. He said, you can have it also about your reason. And through his music and through his life and through his work in his community, he was living out his reason. It's really his purpose. And a lot of people try to figure out how do I find my purpose? And the best way is to live through experiences and you know, find something that you're you're you're really passionate about, or that you do well,

So we lost not only a pillar to our community, but a pillar to the world.

Yeah, rest in peace before we leave. Also, my book tip for this week is a book called The wake Up Call by my guy Ash Cash, and that is he he does an interesting thing where he he yeah, he breaks down like financial topics. It's kind of similar to what we do and pop culture. So that book is based around jay Z's album four four four and he like kind of goes into details like what jay Z's rapping about and then explains like, Okay, this is

The energy out there felt different. What changed for the team today?

It was the new game day scratches from the California Lottery Player is everything. Those games sent the team's energy through the roof.

Are you saying it was the off field play that made the difference on the field.

Hey, little play makes your day, and today it made the game. That's awfu now, Coach, one more question?

Played the new Los Angeles Chargers, San Francisco forty nine Ers and Los Angeles Ram scratchers from the California Lottery. A little play can make your day.

Peace.

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