Up everyone. This is ne ye ale host of the acaba home financial freedom mastermind group. This group meets virtually every Wednesday at 7:00 PM Eastern and the members of this group are committed to achieving financial freedom. Well before the traditional retirement age. So in this podcast, you are gonna get VIP access to the conversations we have about different forms of investment and creative ways to get your dollars working harder for. Then you originally worked to obtain those dollars.
You learn each day that this entrepreneurial journey is really about problem solving and you, you know, this better than me, but a few hours ago, I had a conversation with my cleaners and long story short, going to need to build a new cleaning team. Oh, wow. This was, yeah. It's, it's tough. I still have three weeks or so. Yeah, but this is part of entrepreneurship, right? It's yeah. Learning how to problem solve and.
With this one, it was, we keep growing at a rapid rate and this individual was trying to build their team, finding it hard. And it was just, you know, like working 24 7. That's not good for anybody. You don't wanna run anybody into the ground. Yeah. So long story short, we're gonna need to move on and find the team. But you know, that's news. I got like literally two hours ago. So I'm working on that piece, but I have no doubt. We'll find by the end of the.
We've done that for other positions, other roles. It's just, it sucks that day that it happens. But yeah, this is part of it, man. Yeah. You can't have the goods without the bads. I mean, it's not like it always runs itself forever, but like you said, it's just problem solving and then being quick, quick to adapting and you know, whatnot. That is the key. And Jamie, how you doing man? Good, man. How are you? Super good. It's good to, Hey. Okay. Let me see the sign real quick. that is true.
Hey, I like it. I like it, man. I like it. And I do like catching flights. Jamie welcome. It's good to have you join and good. Definitely wanted to dig into anytime we have somebody new join, we kind of put you on the spot and would love to if you're open to it, if you could share just a little bit of what you do and kind of some of the new goals that you have for the next month. Yeah. So we've been flipping out in Phoenix for a couple years now.
And as the market has changed rapidly in the last six weeks, a lot, a lot of things have, have changed on our end. We have three, three houses that are just not selling at all. And, uh, six months ago they would have multiple offers, probably 50 to a hundred thousand overhead. And now we can't, can't get rid of 'em. So we actually have started the, the process. One that we have to refinance completely and, and start the, uh, and, and work on Airbnb, which is the one I sent you.
And, and you gave me the information from air DNA on that. And then we have another one that we were gonna, we just threw back on the market. You know, it was pretty clean. We, we were gonna flip it, then just decided to see what we could get. Cuz we knew the market was changing pretty quick. And uh, it, I think we've had five people in the last three weeks walk out and it. Received nothing.
So we're gonna go ahead and do a full flip on that and, and Airbnb that one, I literally just got up the phone with the lender right now. So we're, we're working on getting that taken care of, get the construction loan and, and go ahead and get that one ready to go. And then we have another one. That's not getting much traction either. And we're trying to figure out what we're gonna do on that one.
Either, either rent it, give it another week or two on the market, and then see what, see what we're gonna decide at that point. But my gut feeling is that's probably gonna go the same route as the, uh, when I sent you. That's kind of, kind of where we are. And then we've, we've started to, to really get into wholesaling, you know, as, as the market's changed a little bit, we've had to adjust. And Jamie, thank you for sharing that.
Literally it's it's , it's what I was just talking about a little earlier on a different scale. Right. But it's problem solving. Yeah. And being able to pivot and to your point, the market has shifted in the last two weeks or really three weeks since the fed did that last rate hike and have threatened to do another mm-hmm and what I've been seeing, at least around my market. I'd love to hear from other people on the call around your market is.
For the past two years, the sellers have had all the power, right? It's been, Hey, if something sold for seven 50, I'm gonna list this for 7 75, not look at any cops and it's gonna sell for 800. Right? And now with this recent change in the interest rates, going from a low, low of like 2.8 to now, a more normal rate of around five, five or six.
It's turning more into an equilibrium, but because sellers are so used to selling something in a week or so now the buyers have a slight advantage as far as being able to get more concessions, things of that nature. I know I'm trying to help a couple of my clients as well as myself, get through a couple escrows to close them some deals. Is that kind of what you're seeing as well? Jamie and others on the call. Yeah. And you know, I, I actually had a, about an hour with Carson today and.
What he mentioned, which really surprised me is they're now getting agents reaching back out to them, Carson, to for everybody's information. They're they're whole wholesalers here. They're getting agents reaching back out to them who they had given offers to two months ago. And all of a sudden, now they're getting counters to those offers and their they're making deals and actually making money through the MLS with. Almost almost daily now.
So you, you know, to your point that the change in, in going from a E even, even when it was a, a buyer's market, the sellers right now just start seems like they're starting to have a little panic in, in everything they're doing. Yeah. Yeah. And to that point, I was talking and listening to just a couple podcasts and also reading up on some data and actually talked to a couple mortgage lenders and what they're like forecasting and what they're seeing. Two things.
One thing that's not going to change is that the largest population, you know, in the history of the us, which is the millennials right now is all hitting the buying age between the age of 28 and 32 is where most of them are. And some are getting priced out right now and saying, Hey, I'm gonna rent for another 12 months until everybody realizes, Hey, this is like a normal. Way of living.
Like the shock is still like cold water getting poured over your head when it went from 4% to five to, but if you are able to implement a strategy, like you are Jamie, which is to hold onto it for maybe the 12 to 18 month mark, I think you will get that value. Cuz I still don't see prices coming down. I just see, I see more of a psychological shift where it's like, Hey, everybody's like, Hey, let me freeze for a second until you realize.
You know that you can keep going, but would love to hear from others. Abdu, I know you're working out of the DC market DMV. What are you seeing from your market in the DMV? Right now, what I'm seeing is there's a lot more when it comes to multi multi-family, there's a lot more multi-family properties that are being available, but the thing is, they, like they're still going so quick. Right? So like today I went to see a bunch of them and.
and they have, you know, they have offers, but the thing is, they're not closing on their office because some of them had, like, they had like, you know, normal, like you mentioned, millennials that are trying to buy into the multi-family and they, the, you know, they didn't get approved, they didn't get approved on their, on their loan. So now I'm looking back at it and I'm like, oh, I can. You know, I can offer back on, uh, as an investor, I can offer back, you know, investor prices. Right.
So, but you know, it's it's right now. That's what I'm seeing. That's what I saw so far today. But for an investor it's still definitely open a lot more multifamily are coming on board. I I'm thinking, I'm thinking a lot of people, a lot of like investors also, they're trying to sell because they're panicking, you know, landlords and stuff they're trying to sell. Cause they're panicking based on the market. So it is what it is. Yeah, man.
And in my mind, I'm looking at this as, Hey, if you've got the capital, try to buy some more, because if you're able to acquire 'em again, what we talked about earlier, there's still the largest generation hitting that buying age, and they're going to want to move into these houses. And so I'm still trying to acquire a lot. And now using this to our advantage, this short timeframe that I feel like we have of that mental. But switching gears over to Kareem. Welcome to the call again, man.
It'd be good to get an update from you on kind of what you got going on. Hey guys, can you hear. All right. Cool. Well, we had a bump in the road after we were very close to closing. We had to switch lenders. So the first lesson here is always work with a lender that is highly recommended by someone. You know, the mistake that I made was that I, I shopped on my own and I found a lender online. I had a, like a quick interview with. With that lender and everything was fine.
But then I started realizing a lot of red flags that was happening and I noted that, but it was unfortunately too late. And that the further you go down the process, the harder it is for you to switch. So they kind of got you by the belt buckle. So that's my lesson learned from, from that experience, we, we pivoted very quickly to another lender and we used the eight day extension on the contract. Because now we're definitely not closing in.
We're not hitting the, that closing date that that was initially contracted. So we, we using the eight days, we are in underwriting with the new lender and I think they have all the information now that they need crossed and yeah. Hoping to, to close it in a week or so, less than a week hopeful.
Anybody else ever had an experience like that, where you've worked with a lender that you can speak to, to kind of lift KARE spirit just on, on the house that I just referred or told you guys about that actually, and to Airbnb that house the day before closing our lender said, change their mind and said that they needed 30% down. And so we did the exact same thing. We went to somebody else and, uh, we were actually able to still close on the house in 24 hours after the little sun. That is crazy.
And if that lender works in Georgia, please send them my way. it's it's it's not cheap money real yeah, no. So it's, it's green. You are not the only one, but again, I think this, the theme of this call is all about problem solving. Right? I talked about a couple issues, Joe, you talked about a couple Jamie and Kareem, but it's just figuring it out and Shamika, it was good to, to see you on the. What's new in your world. What you got going on?
Hey , me last month, I Tia and I spoke, I just am here to learn and get some education around what everyone does. Ultimately, my end goal is to invest, get an investment property. So I'm just trying to learn from. Everybody, everyone here also getting into, you know, short term. And I have a friend who introduced me to, and he's a, who has Airbnb around this morning here. So I'm gonna just learn ins and outs of what she does in that field.
And for everyone I'm new here, I have a banking background, so I'm just transitioning. I own a home now with my family. So I know everything right now with, you know, selling. I mean, eventually when I, I have two kids, so I do wanna eventually be able to rent out my place to get something bigger and better for my family. So ultimately, like I said, I'm just here for the education. Fair enough. And there's plenty of that to go around. And Joe wanted to kick it to you. I know it's coming.
We've been talking about real estate a lot. You're coming from a more financial background, but what's new in your world. Oh, it's a. Fun place to be right now in financial services, inflation just went up to 9.1% highest. It's been in 40 years. So that is, is a joy causing some stress inside the market. Some panic selling some fear, but ultimately, I mean, things are good. Economy is still strong. That market is strong. Typically we enter into a recession with a big R as I call.
When the consumer is outta money, which is absolutely not the case. People have a decent chunk of change in the bank right now. And when the banks are not strong, and that is also not the case, the banks are very strong right now. So the way we're viewing this is a recession with a small R you know, hoping things kind of start to turn around in the next eight to 18 months or so. But if you look historically at recessions in the past, I can't remember. The time period. Exactly.
I think it's 200 years or so. Yeah. There's been about 44 recessions since the great depression. I think the timeframe might be typically there's a recession every five years. We've just been in a bull market for the past 14. So it's catching people by surprise a little bit, but it's not, you know, the financial crisis. It's not the great depression. Where we've had a major recession. I don't see this being the case at all. Essentially what happened is there was a pocket created during COVID.
Government inflated that pocket with surplus spending, lowering interest rates, lowering inflation, and then things shifted from good spending to service spending. So that pocket got bursts. And now we're just kind of making that shift back. So I think it's a phenomenal opportunity to be buying into market type assets or real estate. Um, Still looking to buy into real estate. Ideally I'll see the interest rates come down a little bit or prices come down a little bit, but me, I would agree.
I don't think we're seeing like a crazy decrease in price point because surplus is still low. We still have motivated buyers and people can still afford their mortgages. There's no, you know, bad things going on there at all. But yeah, I mean, it's just kind of a quick note on what we're really getting told and.
What we're looking at as we're kind of helping our clients out here, but from those recessions, there's 44 recessions almost in 100% of those cases, the market was back up to a positive place within 12 months. So. I mean, it's a nice thing.
I would love the confidence to just dump all my money into the market right now, but I also kind of gotta take my own advice and keep any money I'm spending in the next year or two in cash or market removed assets, because I don't have the money to pay for my wedding in two years, my fiance's gonna be a little pissed off. Hey, and, and you still gotta be on this earth in two years. That's important one. definitely.
Yeah. I wanna help some people I gotta be here, but no. So it's, it's an interesting place, a lot of fear, but I mean, as we've always talked about, if you have a plan, if you've got resources, backup resources, cash flow, a real, estate's a really nice thing to hold right now. It's just not making short term or long term decisions off short term emotion. and that's the hardest part, right? Cause human psychology right now is, Hey, everything's going down the sky's falling.
Let me pull out of everything, sell at a loss and just, and just hold up somewhere where the rich actually get richer, you know, or the wealthy get wealthier during this time period is because they're able to get past that and say, Hey historically, this is what happens. Mm-hmm . And so let me buy this property. Let me flip. Turn it into an Airbnb and not sell it for a loss and then sell it in 12 to 18 months.
Let me mm-hmm , you know, put a little bit more money in the market at this time, or stay consistently putting money in the market. One stat that you mentioned I wanna dig into was the 9.1% inflation this month. Now the 0.75. Hike was that factored into this month's inflation.
If it was, it feels like it, it didn't cause that 9.1, I guess what I'm getting at is in three weeks, the Fed's gonna meet again and they're gonna decide on what they're gonna raise based on that 9.1, are we looking at another 0.75 in your eyes? Or, or what do you, what do you thinking. Yeah. So it's hard to tell for that one specifically, because we look at it in one of two ways. We're wondering, are they going to raise it another 0.75 in anticipation? Of making the decreases less dramatic.
So like if they raise 0.7, five, are they going to then go decrease three months from there 1%, because now they can, because they've over raised interest rates to get to that capacity or are they gonna try to start. Slowing the increase and not have additional rate rate hikes. So it's a little hard to tell a little uncertain.
My thought is they might do another 0.7, 5% rate hike, just so that when they start lowering rates again, they have a nice high number to start at and can say, Hey, we're lowering rates 1%, 1.5% because they raised them an additional 0.75% in such a short time frame. True. True. And at that point it is time to refinance once it comes down a little bit, but no, that's, that's awesome. And thank you for that highlight and just for your knowledge on that piece. Absolutely. I see.
We also have Kiara on Kiara, how you doing and what's going on new in your world. Hey, I'm doing well. Hi everyone. Everything's going well in my world. I was extremely excited for last Sunday, all of our team to get out and successfully build another Airbnb and Peachtree corners. So that's another one on the roster. That's exciting that we're expanding so quickly. Still leveraging the W2 income from my software job. And saving up to invest in a short term rental, hopefully with me in October.
So I'm excited about that and just continuing to learn and learn from other investors and seeing how I can add value and learn from other people as well. So it's been an exciting year so far. Fair enough. Fair enough. And I'm pumped to, we do so the acaba home team is growing a bit and we're starting to build out the short term rental portfolio. And we. A lot in line on the docket.
I think we're gonna have probably 20 units under management, including a couple owned by the team by the end of the year. And so every time we get one of these, when we're putting it together, we have a day where we all link up and we're all, you know, putting together furniture, trying out new restaurants and just hanging out. And so this past Sunday, we did that and actually this Sunday, we're doing another one. So gear we're excited to grow and I continue building the team.
So thank you for the shout out there. Another individual on Francesco, how you doing man? You gotta stop using the Bootle AirPods though. Man, you need, you gotta get the home. Yeah, didn't used to Atlanta. It's like, what two months in? And, uh, it's my first home, the process was pretty intense, but you know, over here. So I'm grateful. I guess the only question is when are you buying your next one, man? It's been two months. The time's ticking. I know. Right? I'm wasting time. Wasting time.
Yeah. No, that's a great question. So my next one is definitely gonna happen. I'll say within the next year. Right now I'm trying to renovations T didn't air. So I felt like, you know, other places it's like, you know, it's automatic, but I guess when the home is older, it, the rules don't fly. Fair enough. And for the record, this is in the DMV. So if you're in the DMV area, make sure you check if it has air condition. that's rule number one. No, that's cool, man.
And again, we're still excited for you to have that first. Under under your belt. Cause from there it just gets easier and easier. And now you understand the process. And so you can almost have a calm mind and, and a major focus going into the next one and the next one and the next one, but really wanted to open it up to the group. Those were just a couple topics, you know, kind of going around rod and Robin. But what is top of mind for the rest of the group? What are you working on?
What are some questions that potentially other people on here could help you with? Please feel free to chime in. I have a question, Nick. Correct. So my, the next step for me would be ideally to transfer the ownership of the investment property from my name into the LLC that I'm working on. And what are the steps, if any, to, to transfer the loan itself from my name to the LLC, or is that something that we do or what's, what's the process.
So I'm gonna give my thoughts and then I would love to get Jamie. Abdu others that have gone through this love to get your thoughts on this as well. So with the LLC, what you're trying to do is just get a little bit of protection and get one step away from the property to where it's kind of in a bubble by itself. And so with that, I believe you're already working with the lawyer to create the LLC. All you want to do is what I do typically. And we'll get Jamie in of Bill's opinion too.
I usually wait 30 days to let the loan kind of season. And then I transfer it into the LLC. And it's not even that hard. You just do a quick claim deed. You really just talk to the lawyer and they'll send you a document. You'll sign it under a notary, send it back in. And all of a sudden your LLC owns that, that property. Now the whole point of not just purchasing the property in the LLC to begin with and purchasing it under your own name is you get way better lending.
All right. Fannie and Freddie Mac will give you a 30 year loan, you know, A lot less interest. And so you do not, I repeat you do not wanna transfer that loan into your LLC because you're not going to get the same type of lending. They probably switch it over to a commercial loan or do a, a Doon sale clause because that does count as somebody purchasing the home. But Jamie, what are your thoughts? I haven't done it. Any, any of that yet?
I mean, I've bought, I've purchased all of, all of our properties that we've, we've fixed and flips our, our purchase under our LL. And, and for the most part, you know, that's not so much of an issue. You don't have to separate it as much as far as trying to protect each individual house on the, on the flip side. But to, to, or to what Kareem was asking, we're gonna have to end up doing the same thing. Once we get into each individual property.
Completed and ready to go into an Airbnb or a rental, you know? So we'll be asking the same question. I'm glad it was a great question. Cause it'll definitely help me out. Fair enough. And, and should caveat this. It doesn't count if you're buying everything cash, like, like Jamie and his teeth have dual, have you had experience transferring things into an lo? Oh no, but I definitely heard of, uh, what you mentioned. I was actually in the process of doing it, but I did it. I started.
Inquiring about it, but I was inquiring about it. I was on the landing side. It was on the landing side I was inquiring about and they were telling me, yo, don't do like, even the were like, no, just do it, your personal and then transfer exactly what you said. So that's what I'm doing. So to that point, let me, let me expound on that. And then KA, please let me know if this fully answered the question.
So. Yeah, you want to get as many loans as you can when you're building up your rental portfolio in your own name. I think the max is 10, depending on debt to income and things of that nature. But the max you can get is 10. And believe me, after you get four, it gets tricky. You gotta bounce to a bunch of different lenders, but you can get 10. And it gives you that 30 year loan where you're locked in at that interest rate. And don't really have to worry about much after that.
You've gotta start moving into either CR loans, which is newer. I feel like, but that's where it's based on the income of the property. And you can still get a 30 year loan, but your interest rate's gonna be higher. And so that's, that's about where I'm getting to right now, I'm about to have to start doing that for every other property or you'd have to do, what's called a portfolio loan, which is more on the commercial side. And I've done that as well. And the terms are not as good.
Like I, you know, I bought a 12 unit under that and I bought that in 2018 and I just sold that about a month and a half ago. Reason being all the rates were gonna reset in about a year. Right. So I had five years of. Amortized over 20 instead of 30. So, you know, the mortgage on that was, I wanna say like close to four grand instead of three grand, cuz it's 10 years less, but long story short.
Yeah. When you're transferring these things, you wanna put it in your name, wait about 30 days so that everything can season and then just reach out to the lawyer and say, Hey, I wanna quick claim this into my LLC. And then it becomes your LLC.
And then when it's in your LLC, You wanna make sure you have your bank accounts, credit cards, anything that you're gonna use for that property tied to that LLC, to make it easier for your CPA and also to separate liability so that if anything happens, not saying it will, cause I know you're gonna run it. Right. But if anything happens, it, it doesn't look like, Hey, you're just paying out of the same account.
That's personal, which could Pierce Tove. You wanna have it completely separate as if that LLC is a different. Got it. So the follow up question to that is, uh, when you transfer that the, does the loan come off of your credit, like your credit report. So if I, if I'm going to the next property, will the previous one show up on my debts? It will. So the loan still gonna be in your name.
and really you don't want to, at least for me, and don't take this as legal advice please, but I don't really talk to the lender about moving a property into an LLC, as long as you're paying your mortgage on time and you have it. I just said it to autopay. They don't really ask questions. Rarely if ever is a due on sale call is called. And if it is, you could just move it back in your name, but no, you, you don't want to. And can you repeat that one?
My one more time cream, I went down a complete side. No worries, transferring the ownership of the unit versus transferring the loan or the debt. So the LLC will own the unit, the property. Correct. But I still own the debt. Correct. And it's still gonna show up on any credit report. So when you're applying for the next loan, it's still gonna be in your credit report, but the thing that you're gonna have going for you, that they look at is the income you're bringing.
Now here goes the benefit and the difference between long-term income like a regular 12 month rental and short term rental. So one of the issues I ran into on the house that I'm purchasing, hopefully this Monday is I have two homes that I purchased last year that I've been using for short-term rental. And because I haven't been doing short term rental or shown it on a tax return for two straight years, They don't count that income.
And so in my debt to income statement have a combined mortgage of 47 plus 27 as a negative on me. So they were like, Hey man, you're, you're pretty close. It was pretty tight. Thankfully I was able to scramble and find somebody, but that's one of the negatives is that with short term rental income, you get significantly more, but they're not quote unquote gonna count it towards you until you have that second.
Now long term rental income, they count immediately, um, because they view that as more stable 12 month and there's ways around this. For example, if you're getting ready to apply for a loan, you could have, you know, Abul could sign a lease because he's moving to Atlanta. We don't know he is not moving to Atlanta. He could sign a 12 month lease for X amount per month. And that could take that statement off of your debt and make you look more favorable.
If that makes any sense, we could talk about that when the time. Yeah. Sounds like a hack I'd like to learn more. Cool. Good. Thank you for that. Of course, that would even add onto, onto that would be if you can. And I know we've probably all heard it, but make, or get a relationship with, with small local bank. That is the one thing that I got lucky and became really good friends with a VP of a small local bank that they only have banks in Colorado, Arizona, and, or in New Mexico.
and now all, all of my, all of, all of our loans will go through him. And, you know, you, you mentioned the, uh, was it the DSCR loans, is that. And, and I brought, took that to him. Cuz you had told me about it a few weeks ago. I took it to him and he is like, yeah, absolutely. We'll take care of that. We can, you know, once we get an idea what the income's gonna be and you know, we'll just do the loan loan that direction. So yeah.
Get those relationships with the small banks are really cool and, and love that. And again, if he expense the Georgia, please gotta let us know Matt. Absolutely. Fair enough. We have a cool lineup of some more guests that are gonna be joining in the future. I believe the next one's actually joining next week, Wednesday. So this is gonna be, it's gonna be a little bit different. Right? So last week we were joined by Jason, who was an out-of-state investor.
That's been doing fix and flips from outta state. He's been doing long term rentals, short term rentals. He used to be in the restaurant industry, et cetera. And we've had a couple, you know, financial wellness individuals as well, such as at dual two weeks ago, we heard about his story and how he's been able to invest in a myriad of different industries. So next week is gonna be a little bit different.
I actually have my virtual assistant, who is a bookkeeper that attends Harvard and owns a whole bookkeeping company. He's got like 20 people working underneath him that bookkeeper for people across the nation. And he's gonna be joining to talk about how he's built his business. Kind of what that looks like. So stay tuned.
I think there's gonna be a lot of nuggets that we can gain from him and would love if you guys were able to join and kind of ask questions at the end, but again, it's great to see everybody's beautiful faces. Let's continue to problem solve, figure this thing out and continue to motivate each other. And, you know, I hope everybody has a great night. Thanks. Thanks Nene. You know that that house is still on the. I hear you. We're gonna put another offer in, got another offer in this week.
Have a good night.