How to Make Money in Real Estate

[Music] all right guys monumental episode today for a lot of pressure episodes well first of all thank you guys for your support our growth has been tremendous you know we're in the top 10% of all podcast audio in the world after 12 weeks so you know it's it's encouraging because you know the content that we point on is educational so it's good to see people gravitating towards that yeah so thank you guys for your support and keep spreading the word is all being organic and grass roots so you know tell a friend and tell a friend and yes yes keep keep helping us grow because the more we grow the more information that we're gonna give away yeah for sure so before we start you know we have to touch on some very sad in tragic news absolutely and our coach in the world with with the passing of Nipsey Hussle and you know we've spoke about it before and I've posted it on page when FC we was like really our God like we really I was like they made a list of people he wanted me 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 was just a hate hard act of violence that just affected so many different people and as you said I mean Nipsey Hussle was somebody that we were pretty confident that we were gonna get a conversation with hell we just I just felt it because that was his economic empowerment is what he was about like you know I mean so yeah it's just a very tragic and sad situation like you said senseless different senseless act of violence an MC man rest in peace King sad sad loss for the world for the culture he was definitely out there doing what he had to do to empower us all you know now we just got to take that baton and continue to rumble I think that was one of the most uplifting things I saw it was like somebody had had the end us and it was like lips II would be proud of y'all work and I was like wow cuz I mean I named his feet to the first beginning of the week I just talk I was just completely out of it but when I read that like he would be proud of us continue to work in the marathon continues I was like let's do it yeah we don't carry this demerit dockets things for sure so this this shows acts dedicated to nipsey antegrade um one of the things that he was very passionate about he was passionate about a lot of things but economic development his community buying back his community and investing in real estate like he was he was big on real estate he was on Forbes Forbes covered up as far as real estate deals and he had just brought the strip mall in his neighborhood actually unfortunately where he was murdered at he brought that strip mall and he was buying a bunch of stuff he had a we work Center yeah a stem center for a bunch of different things he was you know he had him and his business partner David gross they would buy apartment complexes all kinds of stuff so yes this this is the real estate addition because real estate is very exciting and it's very hot and it's very you know it's in the news a lot right now and it's good but it's something that a lot of some people hear about and they just think they're just gonna get rich quick make a billion dollars without doing any work and it does what we doing this shows the educate so what better way to educate and to bring an expert in the field on so we have a very special guest today Matt Garland who is a all-star mortgage advisor Matt just came off with toys in the middle of tour actually he's in the middle of tour quick break he's on teaching in fees bill estates also if you're not familiar jnv is heavy in the real estate game he's traveling around the country putting on seminars to educate people on real estate investing and he has a team of professionals that you know he has on his team for his real estate team if you ever go to one of his seminars and one of the professionals is Matt absolutely so Matt's a good guy Matt as I say he's a mortgage of ours and just very knowledgeable about the real estate industry so thank you welcome listen I appreciate the love I appreciate the hospitality like you guys said on one score right now it's been we just came back from Miami with 50 top you been so cool so far New Jersey New York well Atlantic City Queens we just came back from Miami now we had into Detroit on 4/20 then we got a LAN up for 27 then we're back in New Jersey 519 then Jillian announced yet so I'm not gonna we got 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 I'm in June I'm working on those details now so it's just it's been busy man and on top of thing one thing you're tellin ya nah this is this is nothing man I love what you guys are doing I'm excited to be a part of this and listen to this I'm humbled to be a part of this cuz that's gonna 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 to nipsey a game and we're gonna dedicate this episode to em and I'm hopefully we make him proud with what the information I was learning about Louisville all right so now you're not going to interesting story that's been in the news recently about 56 or Jackson points get the money are you from Queens from Queens Brooklyn and Queens but I claim Queens okay okay I'm 50 yeah 50 cent we like 50 cent he's actually I think he's more entertaining as an entertainer at this point in a rapper absolutely hilarious Thank You Larry it's actually really die trying classic even before the mixtape our mixtape change change the game you can change the game with the mixer ever so all right so he all he bought a house he put Mike Tyson's house in 2000 can we even call it a house we got close that's the exact I don't know if you can call it a that's a knob yeah I think it's the biggest state compound house on the East Coast yeah absolutely it has 50 bedrooms and 19 bathrooms crisis and it's 50,000 square feet so it's ironic it works so he bought it in 2003 from Mike Tyson ex-wife for 4.1 and he he turned into it was like a Playboy Mansion at times ten yes he put he put a stripper pole Paul's clothes Oh do a grotto atrium in it this it was ridiculous a studio like you said a club it was it was called club my head fifty I think no no it's not it was a like a sow seeds of course I hunted down here he went in he put six million dollars into it yeah in addition from the forming that he actually paid for it so he's ten million total ten million and he realized is that I don't really want the house anymore but there's nothing about the house is that it's in Connecticut in the Farmington it's in the middle of nowhere yeah in like a middle-class neighborhood right yeah yeah and it's like five times bigger than any other house in the neighborhood it's bigger than most hotels it's bigger than five times bigger name probably anyhow funny he's called yeah so so now he decides he wants to sell it I think it's one market like 10 years 20 2007 size to sell it he puts it allistic for eighteen point five million yeah try again no they know why he's mine if 18.5 money so he just recently sold it for it two million yeah two point nine two point nine million man so that's like a 79 percent loss the headline was like maybe hole % percent asking present for the house they're like a semi nine percent from total what he's all in yeah and it's so crazy because it's like a I mean the grand scheme of things if you really think about it especially in our area 2.9 million not a lot of money yeah 450 bedrooms in nineteen yeah well you really think attainable no it's not six bedroom homes gone for that price it's crazy out of course down but it's also crazy that it depreciated that much so like what's the takeaway here oh man there's so many takeaways with this story good and bad you know the first thing that stands out of 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 yeah and I don't hear the story in the way 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 stature 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 feed this thing how do we make sure that it stays healthy yeah and it just becomes something that is there that it has no use yeah so they like when we they say white elephant in the other state that's what it's all we're like I remember in Rio when they built it the Summer Olympics they were building all these stadiums and it was like what are we gonna do after the Olympics leaves we have a bunch of white elephants all these stadiums all its infrastructure and the music nothing goes right Griese another thing and that's kind of what happened and in this situation right so that's the biggest takeaway that I got off of being in the business is just don't over improve the house no because you never know what the market is gonna do you know when he made that six million dollar investment renovating the home it probably was a great idea at the time right when you purchased that type of home and you put in that type of money no one at that time was really if you was not in the market you know on Wall Street and really paying attention on the back end which I'm not gonna get into this to complicate it but if he wasn't paying attention you really did know so at that time it probably is 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 the day took such a big loss that we see but on paper when it comes to tax strategies and everything like that listen 50 is smart yeah you know he donated the proceeds to charity tax strategy right along with helping you and only has to do so I'm sure over the last 12 years he's been able to write off a lot of these losses and will continue to project right now he wasn't even living at the residence yeah and one of the things he was trying to do was make it part of his jr. foundation where kids could go as a summer camp retreat and I think like off-camera we were talking about like oh so he probably you know buy this as Curtis Jackson oh definitely probably not as probably was and one of his many businesses names so you know that's when you see these headlines right is i popping but you know 84% loss but do we really know how much he really lost or did he really lose good in this entire deal where you break down from a tax perspective to but the one thing is for sure he over invested into the priority and there's no denying that right you know you purchase it for four point one you put in six you sold it for two point nine you lost it's okay l when it comes to that but on paper you probably didn't take as big of a L that the headlines in the papers are make it out so you gotta keep it classy too it's like yeah it's like putting rims on a Rolls Royce like yeah you put a stripper you can't push typical Connecticut I don't think it's too much listen man no it's good for him but you have a good about reselling what for a resale bus but quite best that's you know again when you renovating your home you gotta be careful because your taste may not be flattering do not think that person that's gonna buy it next yeah exactly you always got to be thinking about that resell that reseller maybe that's something that he never thought that he would ever sell the property you gotta thought he will always keep it right where he was putting those murals up with him things but the property he probably them I thought like I sell this in 10 years or 12 years probably thought it was gonna 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 in whatever direction it needs to move in the market doesn't care about you stripper poles the the person the person who bought the compound he said that he's gonna invest money too yeah renovated yeah so I read that this morning that he's gonna invest millions of dollars into the property so for me this is this is this is like an oven in this story I think that we're gonna be speaking about for years to come because who knows what type of foolery that there's something about that house because before Mike Tyson had yeah the general hold it yeah like I think went to prison what froze right right yeah and a Mike Tyson like weep I should maybe just turn that into a motel 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 orbiting Connecticut which is I mean if you live in a tri-state that's not close to here which is probably what right he wasn't staying there like he's in New York he's in LA yeah it's like 12 a drive yes no like I've never driven to Connecticut it's like yeah bro you're looking at trees it was just a different lifestyle but you know that house is definitely uh like a white elephant like it like you said and that could be a lesson for anyone who's buying real estate because if don't over improve don't put too much money cuz you never know how the neighborhood is gonna change in the next couple of years so if anybody's gonna learn anything from this that's what we need to learn from it don't over improve your property shut out the 50 you got some loose tea got some new services they that way elephant I don't know if that actually if there's a white elephant like is that just like one of those make-believe stories though cuz I'm just thinking about it what makes a white elephant hard to feed than a regular elephant no cuz it's no no no it was rare so it was like it's like the unicorn theory is like yo do they eat the regular food you know say like it was under that premise like how do I treat this oh no bye no elephant doesn't eat I'm like my thing is like a white elephant doesn't even need to be around some story yeah yeah I'm saying about safe that's like like a unicorn yeah we've never seen a beautiful but like how do you feel a Santa Claus well if there's a problem I thought was a real story remember did you post it what increased where they have like Athens what it looks like now they have the Olympics 2010 I know that you know what it looks like no it's ridiculous crazy completely rundown they can't is waste of money wasted money yeah just to have this one event like these things away outlet same things that happen every other I some places should not have they built the stadium in a rainforest Wow tres Rios what and when they excited when they start having it was great the whole city flooded nobody can get to the events it's like dependent eighty million dollars to build this day probably more now we have no use for you know because you can't eat in place before an abandoned stadium in a rainforest it's ridiculous yeah they're like oh we'll have club teams come but they keep our club teams not going some of these club teams can't put a hundred thousand people in there nah I can't afford to go to the games you build is terrible yeah but it is what it is well there you have it we're gonna talk today about how to get in really real estate 101 so for the average person that doesn't come from you know a flu and 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 not say 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 okay there's several different loans out there so let's speak to the first time homebuyer right now when I try to coach all my first time on bias is you know most people want to go ahead and go to White Plains and go to Long Island bought a nice single-family home with the white picket fence and which is cool if that's what you want to do that's what you got to do you got the money for as well you got to have the money for it though right but what I try to encourage all my first-time homebuyers if you don't have a need for a 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 investing you know at some point in your life you start off with a multi-family anywhere between two to four units then you can use programs like FHA which allows you to put down as little as three and a half percent as a down payment okay which is a terrific program so three and a half would be that's pretty small percentage yeah so as opposed to I had to just outright put what is it normally 20 percent no so you have FHA that allows you to put down three and a half percent do and also conventional loans allow you to put down a coconuts three percent but you have to qualify you have to be a certain income restrictions if you buy multi families you have the you know White Plains the the income restriction is probably ninety six thousand so if you exceed that then you won't qualify for that sleeper sit down on a multi-family I'm being you probably have to put down as fifteen percent because it's gonna be a primary residence like FHA is always a good tool because no matter it has to have any income restrictions as long as you within the county's lot limits then you can and you can credit income qualified which minimum credit score is a 580 for FHA loans well we're pointing down as little is doing a half percent by that multi-family and you can live in it for twelve months and then move out of it and then you can write the entire the entire place out and now you created a cash flow investment property for yourself and now you can now go ahead and go buy your one family or your condo or whatever you want and now put down minimum downpayment as well so each county has a set lalume limited entries in yeah so FHA has every county is different right so we're in like five bar rolls Westchester Long Island so up till four family we can go up to one point three nine seven million in every county in America every county in America so if you're you know your audience is probably all over this right so if you know what your County law lemon is just you can google it again you know there live in Kentucky you can google you know FHA loan limits for Kentucky or whatever counties in Kentucky or if you're in Georgia if you're in arm when it county you can google FHA loan than this book when it county right and they'll tell you but one family duplex triplex four-plex that's what they call it down here so that's wrong because yeah that's interesting that you say your first home should be a multi fin you showed me a multi-family absolutely a lot of people have the reverse mindset where they want to get the Pickett white Finch as their first home it didn't I think we want to get like a investment property then they look at multifamily 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 to the multifamily second now you got to put down 25% now unless you have 25% plus closing costs which is probably you know probably spent around 30% 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 investment game now if you go ahead and you buy that one that multi-family first using three and a half percent plus your closing costs now you have a multi-family potentially it's a you're gonna live in it because it has to be your primary residence you have to live in it for 12 months yeah right after 12 months you can move out free and clear no problem now go ahead and buy another one film by one family property and now still do a minimum Dale payment loan because you're moving out of one and moving into the other and as your primary residence so the key to anything is all on how you're structuring your loans a deduction on your deal right and if once you say investment property you automatically think twenty-five percent down payment if you say from difference that's a huge difference is that especially here and where we are yeah you know that can be a couple hundred grand depending on that sales price but if you go ahead into a multi-family first minimum downpayment 12 months you move out move into your single family now you have an asset that's gonna pay for itself and probably pay for your one family a portion of that one family right now you created some sort of cash flow as long as we've had clients both from for family to a family you know and still was able to use downpayments now if you use an FHA loan you can't go ahead and move out of that for family property FHA and then go on to the to family FHA cuz FHA change their rules and what a couple years ago you can't have two FHA loans at the same time right so what you could use it again what's your loan if you read what I tell everybody is this right you buy that for a family or that multi-family good you're staying in you refinance it you get out of the FHA 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 no property okay now your refinance it as a primary primary residence because you're still technically living in them mmm but your intent is obviously at some point to move out of it now you're taking out equity you have a conventional loan on it now now you're gonna buy your one family great you're gonna go moving at one family now you can use FHA for that one family because there is for family or multifamily is now in the conventional mortgage and you took the equity out of death 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 this property depending on the rentals and cash flows and probably cuz that's all it's it's all about strategy and also who don't lead with strategy most people leave with the most emotion since 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 gonna live there I don't care about any of that stuff men love women loud 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 their investor every first-time homebuyer should be thinking like an investor why go by the flip why when there's programs out there for the first time homebuyer like a FHA 203k loan or Fannie Mae homestyle loan where you can get renovation and your mortgage money all-in-one all-in-one know you so why not go and buy look we spoke about envy and Caesar these guys are not buying the flip right there go ahead and they're buying at the foreclosure auctions they buy short sales they find the worst house in the best in the best areas that can and they're putting that money into it and now they're making there are a why why can't every first-time home but I think the same way like that investor why does the NBS and the Caesars of the world need to make all the money why can't the first time all by me 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 may be but now you buy on the market yeah that's the hole so you would encourage anybody to go into buying a home as an investment like even if somebody doesn't necessarily look at themselves as a real estate investor I guess they are roasting it that's the price a little buy a home yeah but what do you think that's enormous 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 a hundred percent sure because you looking at that equity right that equity is what that first time I should be paying attention to and when that equity gets to a certain position you need to act on it you need to do something with it because equity is monopoly money it's not guaranteed the market crashed twelve years ago right when every Hall was depreciating across America so if that doesn't tell people that equity is monopoly money I don't know what's gonna tell them so I have people right now that may purchase a home in 2011 2012 now they may have two hundred three hundred thousand in equity they don't want to touch it oh my what are you doing you need to take that money and do something with it because that the market corrects itself which it will at some point now you're gonna kick yourself that didn't you didn't jump in the game take that money to invest in these opportunities owns right and build that generational wealth for yourself because the market doesn't care about what's going on the market is gonna 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've gotta use it if you don't use it then it's not it's nothing it's monopoly money that's right okay don't the single-family home was great I don't have nothing against a single-family home but I think the strategy move there forward should be multifamily for single families later down the road because you can always buy a single-family home there's never going to be a shortage of that mmm look what's happening a housing is expensive rents are going up the rental market is booming right now so why not put yourself in that position to be resuming owner-occupied landlord mm-hmm where you can basically live for free now have your job now you can save all that money to reinvest into other rooms I think it goes back to where our guest last week talked about as far a lot of times we care about how we're perceived exactly and if I okay well how would I look living in a brief family home I'd rather have yeah the white picket fence we backyard all that well what the Mercedes I look at from a financial standpoint makes a lot from a lot of different reasons it does make sense oh absolutely in a piggyback off of episode eleven which was in a phenomenal phenomenal phenomenal phenomenal you say that so if you guys haven't watch it you need to watch them I saw the tensile episode eleven was fire right so on what he he brought up a great point right mixed-use properties here which makes use properties a common will where we are in New York you can use FHA loan to purchase a mixed use property which a lot of people don't know and put down three and a half percent as long as fifty one percent of that mixed uses residential so you can go ahead and buy that mixed use that may have a storefront but two apartments or three apartments as residential and if you're a business on a few like he said he runs a restaurant now he can live in that one of the units have the restaurant and still have two rental incomes coming in to help support everything now live it for free his businesses for free and the mortgage is being paid off man you can use the tool three k loan to renovate it so you can go buy the piece of excuse property yeah and use that renovation monies to fix it up clean it up and open up a business or rent it out to another business owner the commercial aspect of it and now commercial rates are much higher than residential rates so again living in for one year now you move out now you have a commercial property all under three and a half is on under FHA loan with three and a half percent now plus your closing cost you gotta know the game man you gotta know this game about it's all about strategy most people especially listen we're in the age of the business owner and entrepreneur right most people don't think you still need a brick and mortar but some business is you 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 says one of the toughest businesses because the overhead right in rent is a big thing but if we have a mixed use property and you want to open up a restaurant why not use that as your primary residence also for at least 12 months for that 12 months sacrifice to get the room you get along living it because you always can move out and now you have a business that's basically in there for free there's a new rental property because you look and range with everybody so you get you know you killing two birds with one stone so to speak you get rental and your business in there and your your business is not gonna have all that overhead the pressure up paying the rent because you know what is your mortgage in your tenant to pay for upstairs so it's all about strategy not all good in real estate it's not all we gonna explain it 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 is very popular very trendy right now and it's very has the stigma I think of everybody because they just can't get rich overnight right people don't know it's like any business you know when you go into business without a plan you're destined to fail right so if you plan to be a real estate investor now as you say whether you think you're investor not if you're buying a home you're an investor all right but you don't have a plan in place then you're gonna add probably make mistakes and worst possible case scenario you're gonna fail correct right so this do's and dont's involved right absolutely can you just talk about some do's and don'ts in Novosti game yeah there's tons of them right but if you're a first-time homebuyer one of the don't tell people is especially if you're in the application process you found the house you're in contract don't open the debt don't buy your masais these bins before you go to closing don't change your jobs you know don't do something that will impact you in a negative way to turn your approval to a decline right and most people you think is common sense right but common sense is not common yeah unfortunately they're not it's true most people like they don't realize like when you apply for a car they do a credit check yeah then they have to pull you're great like well they don't realize when you go for a car they may pull your credit with ten other banks to shop right you see what's the best deal for every for the auto finance company not for you that's the consumer right on that affects your credit school and it affects your credit score brings you down I mean I've had situations where people applied and purchased Mercedes Benz a week before closing and I've had people who got Kohl's credit cards just because it was Kohl's Box involved I'm like what are you doing you couldn't wait to get the bed sheets close on the house yeah 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 the car just as quick as you got to prove right and underwriters are always looking for a reason to define 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 sousou's and put in here and doing this and doing that you know say don't do it don't put the mattress money in there no like leave your accounts alone because now we see it start seeing money moving around us red flags now we have to document we have to see what this money is coming from if you can't document that money then we can't use it right and I can blow up your deal too so the the don'ts is it's just keep still keep still relax you're almost at the closing table and when you close you can do whatever the hell you want 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 they maybe you don't need money right because your sonic contracts but if you're looking to do buy and flips or if you're looking to do buy and hold you're gonna need capital right there's many ways you can get capital I mean you spoke about it at my workshop if you do self-directed iras you can borrow from your 401k you can um you can you can raise capital with a group of friends what I'm starting to see right now is becoming more pablo people are coat on their properties together you know moving into multifamily because government working together you know a lot of different cultures co home right blanket you took you know what that collaboration could do our collaboration of business absolutely actually last week so now but collapse collaboration your real estate yeah something that is very key very important leverage can you just talk about this yeah absolutely our collaboration is greater than competition I speak about this often that's why we're here right now because we collaborated because it doesn't make sense to compete we all have something we could bring to the table so if you're first-time homebuyer let's just say your brother is a first time home buying you both want to be in the same area I go back to a single family's why not go about a full family together live on each floor and then you have two rental incomes and now you both can probably live for free or paid minimum together now you can split that equity when it's time I sell or buy each other out when it real estate invest in you don't need to be a hundred percent owner I think that's the biggest misconception that me who think like if you don't we all can we can collaborate we'll create a business structure a joint joint venture business structure and put our money up and it doesn't have to be equal right good and long as it equals to a hundred percent at the end of the day that's all that matters you can be 80% owned and we can both have 10% ownership right because we bring in someone to the table but that would be our portion of the the net rental income or of the proceeds of the sale 10% 10% 80% with you because you're bringing the capital right but we may be the operators and you don't know how to operate right so it's all a matter of what do you bring to the table to collaborate to make make yourself value for where someone wants to put you included into that business and you said something important you said closely you're not seeing that happen no and it doesn't happen because we have ego yeah from client-based standpoint yeah what are you seeing out there like why what's holding us back we hold ourself back you know I'm saying like we we want to be the the top shadow we want to be the this is maudlin this is minds right we have that ego that mentality that that 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 it's sad that I see a lot of people in our community are not collaborating but also on the flip side what I'm starting to notice the trend especially if you look at you know what they call black Twitter or black social media you're starting to see the uplifting you starting to see people coming together and starting to do more together so I think that cycle is gonna stop even broke down from all the perspective I'm starting to see family members now and I'm community buying homes together you know living in the halls together you know you don't need you know to have a 5,000 square-foot home and it's just you and your girlfriend right now if you your girlfriend the parents can all move in even if you want to get the same effect right you know what we split it up mortgage for ways that was more affordable and now we're able to save more and invest together so I think that I mean that's a personal story for me like that literally is my mom model right now like I own a home with my dad and it's easier for us because obviously it lessens the 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 HAP so rather than having them grow an age and have them put them in or have 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 perfect situation for for you to co-op I know for someone like myself when I've purchased my first home 13 14 years ago I didn't want to live with nobody you kidding me your forgot ahead nobody's gonna live with me right yeah but now as I old and I've 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 they all know more people are struggling people are living paycheck to paycheck in New York if you make an educator you're broke yeah I'm starting to see a lot more in our community where people are calling 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 with your net income and if you make a hundred K gross that's really like fifty five sixty thousand net spin lowest even if that's dependent on taxes in a state you're in right but if you talk about 3540 percent if you're making that type of money I mean that's what we're qualified with confident that bigger numbers for me is like if you can barely qualify you atom accidents or debt to income ratio or for gross income you really can't afford it because they're not taking a consideration your your auto insurance your child care you know things of that nature that don't report when your credit reports so you have to be smart is what the message that I'm preaching to people now is like you know be smart about this decision and that's why I preach multifamily and and investing as a primary residence Musa just found a single-family home because you you really can't afford it you know you're a recipe for foreclosure coffee but you could sick coffee that you get laid off good like how we gonna take you along another thing well before we before we finish is that you had mentioned before off-camera that all it's important our strategy absolutely while 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 homebuyer you buy your second home over pump you gotta have a strategy right for tax purposes you need to talk strategy that's why I speak a lot about strategy insurance strategies on we've had that conversation in several times so what I try to tell people go go down right four three two one because if you do it properly you will be able to use minimum down force four units four units three unit to unit so the first home should be a 4 for unit correct then you move out of that you get the three unit home exactly you keep talking but you keeping keeping it the whole time keeping an eye then you go 4 3 2 - yeah and then now you can buy your dream home now you can buy your dream all those assets good that's paying for you got a drink about it right you just accumulated probably what's that seven nine nine doors in a matter of a couple years so if you makin $500 profit a door you know now you you're a single family dream home it's paid for but it's really your dream room and I was like oh this is what I could afford right not what I can afford right now there'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 buy our multis we're buying in areas that we can feel comfortable and safe and then live in for a year and then we're moving out and moving into a little bit step up a neighborhood but going down the units because from an underwriter perspective it has to make sense for you moving from one multi-family to another multi-family you can't buy the floor family near three family on the same block and say I'm moving from one house to another right that doesn't make so that's the play like to move to a decent neighborhood just keep moving up in neighborhood it's just people that's not thanks to a parent they're like I want to be the best possible neighborhood right away but my kid is like 1 years old because I want the school district but what years not gonna make that big no not at all it's not gonna start to listen the kid is not gonna start the 5 I have a four year old right if she is she'll be 5 this year she's going to Kenny daughter right eye hacks every day wishful artists cool and sometimes they don't have nothing to do at school ok right so you got a really thing about it why are you gonna go to that best school district and then the best school district in our areas come with 15 20,000 and property taxes right now with the new tax laws you can only write off to the house of it you can't write under the whole amount no 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 you don't need the school district right now I want you go to the okay neighborhood that you're safe and 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 so they get to you know seventh sixth and seventh grade is when they they brains really start retaining and stuff in my opinion is now you probably want to go to that best school district and then by that time you've probably accumulated you know three four assets that now can help pay for it's the same like people on private school a lot of time people will send their private kids to private school in like middle school they could ever like 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 not a put the kids in front yeah and I have folks that love private school right versus public great but then why you're going to buy the house that comes with fifteen thousand and taxes if you know the boat if you're not myself probably because the majority of taxes our school taxes yeah you're not saying so like why are you gonna pay out of the 15 grand probably ten grand is going to the school but you're still paying probably ten fifteen K a year in tuition who 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 programs only gonna save you a couple dollars for those who don't know what's the star star the star program saves in our school taxes right it used to come off the gross on your tax is not a singular check at the end of the year so it doesn't really help you darn the course of the year you get reimbursed or refunded that's that savings but that's the savings only like two grand so I mean to land versus where's in grant it's like pennies on a dollar when you miss a penny saved is a penny on to do at the same time but it doesn't really help you in the grand scheme of things so what I try to tell people is listen just be smart because you got to pay that mortgage every month in the mortgage man don't care they want their money and if you then I'll get your money they're gonna wanna foreclosing on you at some point so just be smart move the strategy start with rental properties first because the rental properties can pay asset like DJ envy and Caesar bowls at their seminars right which I love that they say you know in be splashy like he loved his cars right we all know that if you follow him do it he's always buying some Rolls Royce or something but he said for that out I don't buy this unless I have an asset that can pay for it hmm so I'm not paying for it I'm paying for the asset losing assets over liability shameless assets over liabilities people driver but he's buying the assets are paid for the Rolls Royce you know we have that same opportunity you know these guys are part of the 1% Club great we all have that ability to do the same thing even if we're not parted about percent we can develop the 1% mentality a monster that's all we need so that's when you asked me what do we first start right here the the mentality is the first place that we need to start develop that 1% mentality develop a strong team develop your 1% dream team you know you need guys like me you need guys like Shawn 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 call order takers you know it's like going to McDonald's you want fries with that right and if you go to a regular loan officer they're not asking you questions they're just thinking to get you pre-approved 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 do with your life because if you tell me hey I want to buy this house but then at the same time you sell one invest boy you're contradicting yourself mmm 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 allegiance 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 sir don't say I hope you godly took notes because this is just like business you know real estate is something is actually probably even more relevant than business because everybody doesn't aspire to be a business owner but right most people have a dream of owning a home right or you know at least rents yeah I live somewhere regardless so even if you're a renter you should still be educated on it because you know real estate is something that everybody partakes their you know email I'm in the country war but even if you're a rental you still should be buying mm-hmm right like why and especially with the Millennials like I had 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 there's nothing wrong with renting you know there's a lot of people in my industry that try to say compare rate versus all in which I get the logic but it's nothing wrong with me in a rental right it's a purpose you know some people you have to be mature to handle homeownership you gotta ferry noise so like that goes into a lot of responsibility enough so that just like I bought a house and I'm a homeowner a great lady but the goddamn ball a break then what right no it's a lot of responsibility take a little maturity to handle homeownership so if you're not mature enough but and you need to rent why not start investing into real estate it starts small stay in 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 in your land whether you buy one home a year or one a month whatever your lane is but yeah so once again thank you for coming you know also it's important to 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 a financial advisor I talk about finance but I don't know about everything to do with finance yeah so that's why we brought you in to talk about real estate I thought we bring you know tax advisors in to talk about tax that's how we bring a lawyer in to talk about legal issues because I'm not I don't do that a little like you know so I'd rather have somebody does it every single day to talk about it as opposed to me just trying to cover everything or Troy just trying to cover everything so networking networking is important in having knowledgeable people so can you tell the people how to contact you let's say I'm on YouTube mg the mortgage guy on Instagram Matt G underscore home loans catch me there or Facebook or LinkedIn my name Matthew Carlin Matthew with two T's but if you have any questions or concern you can shoot me a DM on Instagram I respond I try to respond so all the DMS or you can catch me on one of these dates with DJ and being Caesar and they realistic real estate seminars but I'm around man just howl at me and let's work appreciate it short well I'm gonna and what we started to support from nip took great he said you can have it also about your reason and there was music into his life and to his work in his community he was living out his reason is really his purpose and a lot of people try to figure out how do I find my purpose and um the best way is to live through experience and you know find something that you're you're really passionate about or that you do well that you never had to go to school for and you just naturally do it and find a message in there man so you can have it all it's just about the reason man so make sure that y'all know what the reason you're doing it for and his one of his biggest things that he was doing it was just spreading love for everybody else's benefit and like I said it's unfortunate that he lost his life but he was living his purpose and the more people we can get to find and chase their purpose and living their purpose you know the better our communities would be the better the world would be so we lost not only a pillar to our community but a pillar to the world absolutely so we leave also my book tip for this week is a book called the wake-up call by my god ash cache and that is he does an interesting thing where he you know yeah he breaks down like financial topics it's kind of some of the what we do in pop culture so that book is based around Jay Z's album 444 and he like kind of goes into details like what Jay Z's rapping about and then explains like okay this is the real estate play behind the lyric and stuff like that thank you has something so stop - cash dude we got him on the show as well so it's not the hash cash and yes guys don't forget the merch joy it has the signature assets open liability shirt free we got the cream sure you got the cream joint where I got the okay credit what kind of credit blues everything around us that's the age B&M afford was cash rules everything around the house around we got that we got crop the crop top hoodies for the ladies yeah the dad has is moving right now had hats and yeah also our patreon as well like I said patreon that's a way to support us financially support the podcast financially so we can keep bringing people home we can expand the podcast we can travel and we can give you guys education on a weekly basis so yes thank you for your support and we will see you guys next week peace [Music]

Channel: Earn Your Leisure

Views: 55,114

Rating: 4.9525981 out of 5

Keywords: Real estate investing, How to make money in real estate, Mix use property, Fha loan, Multi family home investing, 50 cent mansion, 50 cent real estate, 50 cent home, 50 cent loses money on house, Passive income, Generational wealth, Rental income

Id: p68JB-XQPco

Length: 51min 6sec (3066 seconds)

Published: Tue Apr 09 2019

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