Real Estate Q&A: Responding To your Comments 12/26/2020

hey everybody so uh i thought i'd hop on here and do kind of a quick impromptu live q a um just gotta talk about some real estate stuff some market updates that kind of things uh and i wanted to respond to some of your questions from youtube as well i couldn't get my fancy camera working so we're working off the web camera today which uh you know shouldn't be a problem uh yes if you guys have any burning real estate questions feel free to ask them in the chat i'd be happy to talk to you guys in here and i got a couple really good questions from uh comments on my youtube videos so let's go ahead and jump into a few of these kind of kick this thing off so uh keisha says sir thank you so much for sharing this information i have a question in order for me to purchase another home using the va a second time and selling my current home does that home have to be paid off in full first to use my benefits again for the new home yeah so the va loan is a fantastic program if you guys qualify for it um but it it is kind of tricky and you can use it multiple times i've now purchased three homes myself using the va loan and i still own two of those homes so typically how it works is that um you have kind of a maximum amount that they'll lend you if you're purchasing more than one property they recently updated the va rules in 2020 the beginning of the year that um now there is no limit if you're buying one house but if you're buying more than one house they still have a cap and they call that your entitlement is actually broken down by the county that you live in and you can go online and there's a big spreadsheet that shows every single county in america and how much your maximum entitlement is for the va loan in those counties um and it's cool because some areas have higher price ranges than other areas you know washington dc if you live there homes are just more expensive than they are in iowa so the maximum entitlement for that area is going to be a lot higher so if you're purchasing more than one property you can own more than one property under the va loan as long as both properties combined is lower than your maximum entitlement and that entitlement number does go up so i purchased my first home for 210 000 in 2010 and uh the va entitlement has gone up significantly since then now uh and then i just purchased my last home for um i think i borrowed 380 000 but because at 380 and how much i still owe my first home which i think is like 180 combined is below the maximum entitlement for this county in maryland which i think is like 600 000 i can own both of those homes uh at the same time both of them using va loans even though i'm renting out the first one now if um you want to buy a a house but you don't have enough entitlement left over then yes you're gonna have to either sell that first house or refinance of it refinance it out of a va loan into a conventional loan a refinance into some other type of loan to free up your va entitlement so that you can then use that entitlement to purchase your next property but i help a lot of service members doing exactly that buying multiple homes using the va loan um and i i love it man i think it's one of the best ways to get a rental property this by far is the best hack out there for you to acquire your first rental property is to purchase it as your primary residence move into it fix it up and then like a year later move out and turn it into a rental property what i love about it is doing this technique is that you can use loan programs that are only intended for primary residence so va loan fha loan usda loan those are all really only for your primary residence you can't use that strictly to buy an investment property so by buying a home living in it and then moving out you can you know use that as an investment property a lot of the loans um they make you sign something saying that you're going to live you intend to live in there for at least 12 months but like if you guys you want you want that easy as hack to buy a home buy your first rental property for zero down use a va loan or a usda rural development loan which is also zero percent down live in the home for 12 months fix it up move out turned it into a rental property that's what i've done and i love that technique and i often advocate people to use that technique to get into real estate investing and buy the first rental property uh george says good morning merry christmas yes thank you merry christmas to you as well happy new years happy holidays i had a pretty good christmas i i took it pretty easy we had a very casual you know we did a webcam with my my folks um you know we i i got my wife a couple small things she got me a beer making kit which i'm pretty excited about um and what else did she get she got me something oh she got me a a gift card for one of these sensory deprivation tanks i don't know if you've ever seen many of those but you you sit in this tank and you float in it and it's completely dark so you don't have any sight you is quiet you don't hear anything and you're floating so you don't really feel anything so you don't have any like sensory inputs um anyway i'm really excited about this i've been wanting to try one of these out for years and she got me like 100 gift cards for this place to do one of these sensory deprivation tanks um but yeah i had a pretty good christmas how was your christmas you guys let me know down in the comments how your christmas was um let's see we got another question here so another thing to consider is property taxes been in my home for ten years if i refinance my new property tax assessment would likely double from two thousand dollars a year to four thousand dollars a year also need to add that to the mix at least here in california um so that's a bit of a misconception uh your property taxes probably will go up they're probably going up already but most state property taxes there's a cap of how much they can increase every single year um and i don't know the exact number i think it may vary by state but let's say your property taxes can only increase by like two percent a year it's something really low so that means like every year instead of 2020 your property taxes being 2000 and 2021 they're now 4 000. it's gonna be like 2021 they're now and like 2050 a year and then the next year's two thousand one hundred dollars a year it's very slow increments to get your property taxes up um and yeah if you refinance your home that could increase your property taxes but most likely they're already increasing that's something a lot of people don't talk about that with the home value skyrocketing 16 nationally in the last 12 months everybody's property taxes are going to be increasing no matter if you refinance or whatever you do across the board everybody's property taxes are going to be increasing for the next couple years probably five six years um here in maryland property taxes are about one percent of the home's value so four hundred thousand dollar house your property taxes are about four thousand dollars a year um so yeah if everybody if a 400 000 house is now worth 450 000 ultimately it's going to get up to thousand five hundred dollars a year for property taxes like i said they're gonna doing doing that incrementally something i need to research a little bit more is if your insurance is going to increase and i think it would if you have insurance on a 400 000 house now it's insuring a 450 000 house i would imagine your insurance would go up as well and that probably doesn't have that incremental steps that your property taxes does i need to look into that a little bit more but it it kind of it this is kind of hurting a lot of our retirees you know my grandmother is almost i think she is 90 now and her house is completely paid off all she pays is the insurance and taxes and no faults of her own but now her taxes and insurance are going to go up because of this crazy real estate boom that we've had so there's a lot of people out there that are on a fixed income that they retire they're living off social security they own their house outright and they're kind of getting screwed over and now they have to pay more property taxes and higher insurance um moving forward so it's just something that a lot of people don't really think about or consider but um yeah like i said a lot of the states they do have only incremental steps in your property taxes so yeah so what what what the dude said there that he doesn't wanna he doesn't wanna refinance because his property taxes are gonna shoot up from two thousand and four thousand so first off that is very fuzzy math if you ever see anybody say oh my property's actually gonna double like no he did not actually calculate it hasn't really looked into it and that is not a valid reason not to refinance your home um i actually have a whole video about refinancing your home uh a lot of times i don't recommend it for a lot of people like if you get something in the mail saying hey we'll save you 400 a month on your you know your mortgage payment a lot of that stuff is it's not necessarily scams but they're it's very scammy um and i would not ever refinance with somebody just because i got some marketing piece in the mail but there is kind of a whole formula that you need to figure out in order um to see if it makes sense for you to refinance your home or not and i forget the the exact name of the formula i have it in that video that i have i'm actually really proud of that video the video hasn't really done all that well but i put a lot of time and effort and thought into that that video i think it's just that that topic isn't that viral of a of a topic but go watch my video if you want to learn more about refinancing your property is the cost benefit analysis no so essentially if you refinance your home you have closing costs it does it's not free to refinance your room you have to pay money and a lot of people are not upfront with that at all they don't a lot of people won't even tell you how much it costs to refinance and i kind of so that's that's kind of one of the scammy parts about refinancing is that there's a lot of hidden fees they don't they're not very transparent with you about then a lot of them in order for you to get that lower interest rate they're charging you points so points are essentially you're paying interest upfront to get a lower interest rate so you may pay five thousand dollars but you get your interest rate down by half a point a lot of these lenders sneak these points into your mortgage when you're refinancing your property which is very deceptive and i don't like that at all but with how low interest rates are right now it probably does make sense for a lot of people to refinance i'm strongly looking into it for my rental property um now if you're if it's a rental property and not your primary residence you're not going to get the same interest rates they typically charge a higher interest rate i just haven't looked into it yet i don't i think interest rates are going to keep going down for a while now so i'm just kind of biting my time but with that so so you have closing costs so let's say you want to refinance your house and it will save you let's say 200 a month in interest um but it's going to cost you eight thousand dollars in order to refinance that so that's what you really need to focus on is that eight thousand dollars and they typically just add that to your loan so a lot of people don't even like really realize that um it's just a lot of people are not very transparent with that but what you need to do is figure out okay so i'm gonna save 8 thousand or i'm going to save 200 let's let's pull out the calculator here and just let's just see if these numbers add up so if you're going to save 200 a month um it's going to cost you 8 000 so you'd have to live in that house for 40 months before you just break even that's what it's called it's called a break even analysis um so that's 3.3 years so you're not really saving money until you reach that point and after 40 months with those two numbers with 200 a month and it costs you 8 000 after you know three years that's when you're gonna finally break even and actually start saving 200 a month um and it's a whole formula that you guys really need to look into uh and the property taxes i mean that's interesting yeah maybe you could try to factor that into your breakeven analysis a little bit that your property taxes may go up incrementally i wouldn't really worry too much about property tax there's not much you can do about that we're all just kind of screwed when it comes to property taxes all right we got some more questions here so alfredo says alfredo rodriguez says uh the gses are trying to get out of government um conservatorship do you have any thoughts to share on how this might affect the housing market and on whether or not allowing this is fair to taxpayers um i'm gonna be honest man i i don't know what gse stands for the glc trying to get out of government conservatorship i'm not really sure what that word means either uh library comment down below what gsc stands for um maybe just kind of elaborate on that a little bit more i'm not really familiar with that topic bruce says hi and bruce is a fan of mr beast i'm a fan of mr beast rebecca hi rebecca how are you she's one of the moderators in a facebook group i run calling a real estate youtube mastermind facebook of real estate agents who are using youtube uh like this and she's one of the moderators on there she's got a great channel too if you guys want to check her out um when the forbearance came into play earlier this year will that play a role on tax liens at the end of this year oh yeah um if someone was escrowing their payments or will the bank pay for that yeah that's a great question and i i think what's happening is that that's going on on a state by state level that's that's my understanding and so what she's talking about here is that your mortgage payments made up of four different smaller payments sometimes a few more than that but typically for so your principal which is paying down your debt to the bank your interest which is the interest on your remaining debt your uh insurance your property insurance and your taxes and so when people are filing for forbearance and they get to skip their mortgage payment for a few months or tack it on to the end of their mortgage um well they still have to pay property taxes and typically part of your mortgage payment goes into an escrow account and then your lender pays your property taxes for you at the end of the year and they do that because that home is the collateral collateral asset that if you um that they can repossess and they don't want the state to repossess your property because you don't pay your taxes so they pay your taxes for you so yeah this was a big question for a lot of people is okay great you have to pay your principal and interest for 12 months but what about your property taxes what about your insurance and i don't know i don't know how um i think a lot of states handled that on an individual basis i don't know if a lot of states were still charging people for property taxes it may be the banks or yeah i i don't know i mean i i would imagine you still to pay property taxes still to pay your insurance um you know we'll see if the banks say hey since you didn't put any money into this escrows account at the end of the year now you have a big lump sum and property taxes that you need to pay yeah a really great question and i i would imagine each state's going to handle that differently whether or not the state is going to work out a payment plan with them like there are options i don't think they're going to go right to the nuclear option foreclose on them or repossess their property they can have some kind of payment plan or something merry christmas malcolm we had a great christmas and are enjoying our time together fans house like yeah you know i've been kind of slacking with real estate lately um and i've been eating really bad and today i'm like okay today's the day i'm getting back to it i recorded a video i'm doing a live stream i'm hustling i did some projects around the house i went for a walk today i'm trying to eat healthy so today is kind of getting back into the hustle mode uh do you escrow your taxes insurance on your rental property i do uh yeah i just i just keep it simple i let the um the property i love the the bank handle that there are some people like you can go to your lender and say you know what i want to pay my own property taxes and what that allow you to do is you can hold on to that money um until you have to pay those property taxes rather than just sitting in a bank account somewhere and then you can invest that money and probably get some kind of return on it but it's a pretty small amount of money so you know that house is my my rentals worth about 300 000 so let's say i pay 3 000 in property taxes a year like sure i could invest that and if i had it in the stock market maybe i could get an eight percent return on that um but man that's what a headache i don't feel like dealing with that headache there are people who do that um and yeah if you completely paid off your mortgage you didn't have a mortgage a lot of people don't think or realize is that well now you have to pay your insurance and you have to pay your property taxes yourself uh rick here says what is your advice for someone looking to invest in class c multi-family properties in 2001 and 2022 so yeah multi-family properties i'm all for that um so i mean i think that's four units or more considered multi-family but you could still buy a four unit or three unit or two unit um and i think like the loan programs well i guess they're still a multi-family but you can buy up to a four unit using uh like a va loan or fha loan um class c now i'm i'm guessing that means um like in terms of investment like they if they had a graded a b and c uh you know it seems like a term from like biggerpockets.com uh so if class c if that's if that's indicating like higher risk tenants and probably lower income if that's what you're saying um i would caution against that there's a lot of new investors that get into real estate investing and they think oh man i wanna they focus on having as many units as they can that's what their focus is on i want to have 20 doors in the next 20 years i hear people say stuff like that but here's the thing with having rental properties um if you have a lower income property you're probably going to have a lower quality tenant think about you really focus on the quality of tenant and how many headaches you're going to have with a lower quality tenants than you will with a higher quality tenant you know if i could have one rental property that's five hundred thousand dollars um and i get three thousand dollars a month for it let's say that's going to be a pretty high quality tenant right there most likely it's probably going to be some middle class family or upper middle class family with a good paying job with kids going to school i would much prefer that compared to three 150 150 000 houses like who if you have 150 000 house here in maryland that's who's gonna who are you gonna rent that out to somebody who works at like walmart or is in construction or something or you know maybe two single guys in their early you know 20s that are roommates it's just um the quality a tenant is going to be a much bigger headache now there are some benefits to having multiple homes like on paper on a spreadsheet you can see some benefits there that at any given time the chances of all three of those units being vacant is much less um but to me the headaches that are involved with that and now you have three different homes that you need to find tenants for and manage and those quality attendance is going to be much worse i personally don't want that um so if if that's what you mean by class c personally i want the higher quality tenants that are just much easier for me to manage you know i personally man i don't have huge ambitions to have 20 rental properties um if i could have like five rental properties and they're all really good properties that don't have things that break on them often they'll have really high quality tenants that don't give me any headaches and all have reliable jobs that's all i want i don't want 20 units you know up in baltimore or something crazy like that uh you're saying this down in texas okay uh government sponsored entitle oh okay government sponsored enti entities so let's come back up here to rick's uh original question where was that or okay alfredo the government-sponsored entities are trying to get out of government conservatorship do you have any thoughts to share on how this might affect the housing market and whether or not allowing this no no i'm i still don't know what any of that means i'm sorry man you know a lot of times you have individual states that may have different lingo than we have here in maryland it may be on a state-by-state basis but i'm not really tracking on that question gsc government-sponsored and enterprise are fedi mac and franny fannie mae the government took over their operations when they became in solvent in 2008 they're called conservatorships oh interesting uh and then he gives a reference for anybody who wants to learn more about that yeah very interesting the quality of tenants is a big factor yes quality of tenants is a huge factor um i got a new tenant in my rental property just in the last few weeks and i'm super excited she seems like she's got a great job working for the government so i know that she's not going to like lose your job because of this whole virus and uh really nice single older woman she actually wanted to sell she's trying to time the market so she sold her home just because she's like wow i can't believe how much home values have gone up and she's just kind of sitting on the cash now and living in my rental unit and i'm perfectly fine with that i don't worry about parties or holes in the walls or anything like that she's a very high quality tenant uh so i'm pretty excited about that you know i i just want i don't want to invest a lot of time i guess i want the least investment of time into my rental property so i don't want to i put a lot of money into my rental properties i recently replaced all the appliances i got a new hvac system in there just because i don't want to get that call of hey man something's broken you need to come by and fix it um and i want good tenants in there and i try to i really do try to have a good quality of living in my rental properties on the flip side of that if somebody is trying to do the absolute bare minimum work into a rental property and like the quality isn't all like great it's a very low um rent that they're charging they're just not going to have the high quality tenants you know the best way to get a high quality tenant is just to have a higher income um rental unit and i know that that may sound a little harsh um you just talk about the quality of tenants but it's something that you do want to factor into like you just i just i want to hit the easy button sometimes uh michelle says we are thinking of selling our home in cape creek arizona realtor here are in renting for a bit this spring in california i know you can't time the market but curious if we should wait a year before buying um no i would not recommend waiting a year before buying so that's interesting so they want to move from arizona to california usually it's a complete opposite of that there's a big exodus right now out of california into states with much lower taxes like arizona like uh like texas for example a lot of corporations are moving out of uh california as well so she's doing the exact opposite so he's moving from arizona to california which is very interesting so expect to have much higher taxes there in california and so you're saying should you wait a bit so that is a dangerous game and i typically don't recommend it so you're trying to time the market and you're hoping that there's going to be a big market crash you can buy at the bottom you want to sell the top buy at the bottom i don't recommend playing that game um you know if you want to try to time stocks you know you can do that um time cryptocurrency markets buy and sell gold and time all those markets that's fine i wouldn't recommend trying to time the real estate market um i would just move when it's right for you and your family and something to consider is that you are selling at the top of the market right now right home values that are all time high but you're also buying at the top of the market so those two things are going to kind of even out so you may be looking at homes like i can't believe or buying at the top of the market but you're selling at the top of the market too so it's kind of cancelling each other out if you sell right now and you wait another year and home values go up like you're you're losing that then you're actually losing um i wouldn't try to make predictions i mean i do try to make predictions but i wouldn't gamble my own money on trying to time the real estate market even though i literally study this stuff all the time and especially because right now there are just too many this is what's known as a black swan event this whole pandemic it's an event that you can't see coming and so when you're trying to invest and make predictions you just can't see this coming and there's just too many opportunities here for other stuff like this to happen so we're rolling out the vaccines right now there could be logistical issues with that this could go on you know it maybe the vaccine is not as effective maybe there's a new strand maybe um there's a big political movement not to take the vaccine maybe the anti-vaxxers take over right and all these things could happen where the real estate market could continue to go up in price for the next 12 months there is a scenario that could play out with that happening uh so because of that no i don't recommend that you try to time the market um and try to sell now and then wait a year and try to buy the bottom of the market i don't recommend that you do that um yeah so i made a video the other day about my predictions of the 2021 housing market and one of the comments was um they're trying so hard to prevent the housing crash but it's not going to work people are not going to be able to keep their homes when inflation starts making everything cost more so inflation is something that i've been diving really deep into the last couple years and it's really been on my mind inflation is a crazy thing and it's hard to wrap your brain around and it's hard for me even my brain around it enough that i can properly convey and express and talk about inflation um but you're saying that uh when inflation starts making everything cost more yeah but so the thing is so inflation is your money literally is losing value the federal reserve's target right now is that they want two percent inflation a year and they're struggling just to get two percent but the last ten years or so we've had about two percent inflation a year there are some points in american history where we've had up as as much as 15 inflation in just one year in a 12-month period where your money itself is losing value um of 15 percent proper kirisaki has a great quote that says if you're a saver you're a loser and it sounds harsh but he's talking about inflation if you had a hundred thousand dollars in your bank account just sitting in your bank account and we see 15 inflation well guess what you just lost 15 000 um and so it's his point saying that people are gonna we're gonna see inflation i can be able to afford anything it's not quite the same i mean that's partially why people get raises all the time um it's you know the housing market typically outpaces inflation that's something else that's a good thing about the housing market is that it it almost always outpaces inflation and that's the real appreciation so if your home's value went up three percent and then inflation went up two percent you're still a one percent net positive on that but yeah inflation is a crazy thing and we may see hyper inflation you know typically when you print more money that money loses value and the fed is literally trying to raise inflation right now um this is much higher than my pay grade but our government wants inflation inflation helps stimulate the economy because it encourages people not to save money but to go out and spend money um instead and inflation also lowers our national debt which is kind of crazy and you all know that we have a highest national debt ever now let's say we have a two trillion dollar national debt much of that national debt is actually to ourselves they were borrowing it from the social security fund and other countries but if we have two trillion dollars and suddenly we have 10 percent inflation well now that debt is lowered by 10 so the government there's a lot of going on and the government is trying to manipulate this plate to stomach create inflation um and we may see very high inflation rates over the last 10 years we've seen about 2 which is incredibly low historically low two percent a year but i wouldn't be surprised if we see a four percent inflation rate a five percent inflation rate over the next few years and so what that means is that you don't want to have your money in a fiat currency you want to have your money in some sort of appreciating asset um invest in stocks put in the stock market uh put it into real estate real estate almost always outpaces inflation by a lot put it um you've seen a lot of people buying gold right now a lot of people buying bitcoin right now because these are appreciating assets every single year they appreciate in value whatever you do don't just sit on your money and just have it in cash you know most millionaires you could most people have hundreds of millions of dollars they don't have that in their bank account if you had a hundred million dollars and you lose uh you're losing two percent of it a year to inflation so most millionaires don't just keep money in cash because it's a depreciating asset you want to have that money in something some sort of store of value personally i have a lot in bitcoin that's something i could talk about a lot um i'm very passionate about bitcoin that really is the future um and yeah 2021 is gonna be a wild ride for bitcoin uh the quality of 10 is a big factor it's a big gamble to try and time the market yeah i i don't very few people tell you to try to time the market in terms of real estate um unless it's okay i'm really i'm talking about your primary residence that's what i'm really talking about i'm talking about don't try to time the market if you want to buy a rental property at what you think is the bottom of the market by all means you know i'm okay with that and the reason why is i think we're going to have a huge opportunity for um investing opportunity in the next 12 to 24 months or so because at some point the moratorium on foreclosures is going to come to an end now i was reading this study today as doing another video today breaking down a report we have 2.8 million people actively in forbearance right now who are deferring their mortgage payments um but let's say you know half of those people ultimately get foreclosed on after for forbearance ends you know that's 1.4 million foreclosures right there but we also have all the people who would have been foreclosed on anyway over the last 12 months or when they initially filed this forbearance all those people who would have closed on anyway are all going to get foreclosed on at the same time in addition to all people around forbearance who when that ultimately ends so we are we're just going to see a big surge in foreclosures at some point it has to happen they have to allow banks to foreclose on on people it's going to happen we're going to see a big surge in foreclosures and what i'm looking for is if we see a big surge in foreclosures and interest rates are still low like there may be like a six to 12 month opportunity there where we have a huge inventory for closures and interest rates are still low where you can buy one of these foreclosures with a really low interest rate um and so you know i do have i you know like i said i don't keep my money in money i have an investment but it mentally i have some of that investments allocated that i'm willing to take that out and put it into the real estate market so in that sense i'm going to try to time the market but i'm not doing it with my own primary residence primary residents don't try to time the market inflation has been on my mind a lot too yeah a lot of people are very concerned about it and what's really interesting is like the federal reserve they're trying to get two percent inflation and they're failing at it they can't they they want inflation and they can't get it according to their metrics anyway so it's kind of out of control we have out of control inflation but it's it's it's in the wrong on direction and right that's really confusing that doesn't really make much sense to me but it that's what the everybody's saying japan has been trying to create inflation for 30 years they're printing money like crazy they're doing all these other things to create inflation in their economy and they have been unsuccessful at creating inflation in their economy um so yeah inflation is just a crazy thing and you know uh we'll see what happens with that um something definitely keep an eye on but we've printed a tremendous amount of money and you know economics 101 you print a lot of money you expect to see a lot of inflation from that and i had to get too political here but um you know if we do have democrats in power come january which we will with the presidency and congress and we'll see about the senate if they have all three of those then we are probably going to see more stimulus checks right we we haven't had a stimulus check in a long time and we do see more stimulus tracks there's you know i would imagine that it's going to be the fed printing money more money um to create those seamless checks so i would imagine the fed's going to print a lot more money um under biden administration as well in order to help stimulate the economy which you know i'm not for or against it's just what i think is going to happen um and so we'll see if that that triggers some inflation but yeah don't have your money in money have it in real estate in gold and stocks and bitcoin whatever you want just don't have it sitting there in your fiat currency sophie says sophie art music says it's expensive to buy groceries or take out most of my leftover money goes to high cost of feeding my family yeah that's that's that's rough i'm sorry to hear that um yeah groceries are definitely expensive i mean that's that's the thing like somebody in my last live stream said something along the lines of what goes up must come down home prices are going up they're going to come down they're going to crash stocks are going up they're going to come down they're going to crash but that's not true what goes up doesn't come down when you're talking about what uh financing because of inflation everything goes up and it goes up and goes up and goes up so home values are going up because largely driven by inflation stock markets going up largely influenced by inflation the price of gasoline and the price of milk in groceries everything goes up because we're we have an inflationary currency uh my tenant of three years is not renewing her lease since she's looking to buy a house i will have to sell don't want to be a landlord anymore oh i'm sorry you don't want to be a landlord anymore um right now is a great time to sell you know uh truthfully you're selling at the top of the market if you are selling now one thing to consider like being a landlord is kind of a pain in the neck it can be but something to consider is that there's three ways that you make money off a rental property so you know most people just think about cash flow so if you let's say your tenant's paying you a thousand dollars a month then your mortgage is only 700 a month you're making about 300 a month cash flow um not factoring in taxes and everything all these other expenses um but cash flow is only one of three ways you actually make money from rental property so the other one is appreciation so your rental property well nationally homes are appreciated in value 16 a year according to the nar so your home's appreciated in value probably quite a bit this year just by owning that rental property and the third way is from debt pay down so every single month your tenant is paying down your debt for you so i mean i would reconsider holding on to your your rental property especially if it's some passive income for you is continuously coming in um just because 2020 is a great example of all appreciation typically homes appreciate three percent a year this year they've appreciated 16 so i don't know what the price range is of your rental property but you probably made several thousand dollars in equity this year from um owning that property and appreciating in value uh val k says thanks malcolm what are your thoughts on the impact of georgia election and possible democratic legal sweep for the next two years as it relates to the economy and real estate uh yeah so right yeah so i mean my understanding is like right now there's what two senate seats available in georgia or something along those lines and yeah if the democrats win the one those then um they'll have unanimous control over the the senate the congress and they'll have the um executive branch and so here's the thing um they'll at least be able to get something done i the democrats having complete control or the republicans having complete control of all three of them i think is a good thing because things actually get done in either of those situations if either party has control of all three of them now all the responsibility is on them they can't blame the other party so they are going to actually pass bills you know right now we don't have a stimulus check the republicans are saying it's the democrats the democrats are saying it's republicans trump is somewhere in the middle i don't know who's trump even blaming it on right now um but nothing gets done right so i'm excite i yeah i do want the democrats to win it just so that one party has complete control and all the responsibility is on that party whether things go up or down and get better or worse that one party has complete control and i honestly i think that a good chance that democrats are going to win it largely because trump has been coming out telling everybody it's a rigged election and a lot of people are saying well why even bother if it's rigged and that's that very well may backfire um and cost the republicans that seat um and so yeah what do i think's gonna happen we're gonna get some stimulus money i'm sure we are we were very close to getting that that money um and it's yeah it's really interesting that trump is for more stimulus money but mitch mcconnell it seems is not for more stimulus money um and you know i broke down i did a video breaking down biden's plans in terms of the housing market a little while ago and a lot of them i think are pretty good plans one of them that i really agree with is that he's going to um incentivize builders to build more lower income um units lower income housing right now a lot of builders in my area all the new construction homes are like 500 seven hundred thousand dollar homes there are all these huge mcmansions there's no really like new construction communities here in maryland at least that are in like hundred fifty thousand dollar two hundred thousand dollar price range and i think that's that's sucks as like a society that kind of sucks um because then a lot of those people who could afford that are just left renting and so they're not building as much wealth and not as much equity so i i'm all for some sort of um plan to incentivize or provide tax deductions or something for builders to build much more affordable and smaller and simple new construction homes in that hundred and fifty two hundred thousand dollar price range uh just to give a lot of renters another option that's more or less one thing that biden's planning on doing which i do agree with um so yeah i mean i i'm excited to kind of see what what happens over the next few years um buying in california right now is crazy people are over bidding by 60 000 plus skipping home inspections and appraisals i'll wait it out yes it is crazy it's it's almost as crazy here um as it is in some of the other places i'm in maryland so it's almost it's pretty crazy here as well most houses in kind of that 300 600 dollar price range which is kind of like that middle price range for us here in maryland they're getting five six offers on that property within just like a week or so and they're almost always selling above list price and it sucks it's it's very frustrating i have to tell my clients now now i'm like look man we're going to probably have to spend two or three offers before you finally get one submitted and yeah i'm hearing stories of people um saying you know they have 24 offers on a property and um 60 000 is is a lot i think the most i've seen here is about 40 000 above list price um but it's it's it sucks it sucks for the first time home buyers too because a lot of them rely on these government-backed loans va fha loans and they require an appraisal to go along with that and a lot of first-time home buyers you know um so they're kind of capped at how much above list price they can offer so somebody can't just offer sixty thousand dollars above a list price on a three hundred thousand dollar home here because it's not going to pass the appraisal the seller agent wouldn't even accept that because they know that that house is not going to go through so a lot of those first-time home buyers the ones are really getting screwed over and it's a lot of the people who have have money and they can pay out of pocket that's 60 000 above list price in order to get their offer accepted they're the ones who are actually winning these these bidding wars and i can't wait for it to stop man uh like as a real estate agent the number of transactions going on right now is way up home values are way up so our commissions are increasing a little bit not nothing too dramatic but i hate this market i can't stand i hate working with buyers and we i do everything we can to put their strongest offer forward and they're still getting their offer to client you know when i when i bought my first home i bought it in 2010 i bought it using the va loans i didn't put any money down and i had the seller pay all my closing costs and i was able to get into a home and my mortgage payment was less than what i was paying for rent and i had a larger home than what i had when i was renting and i was always deeply appreciative of that opportunity that the government essentially gave give me in our society has given me essentially a free house um and when i was 25 and i'm still benefiting from that 10 years later right i still own that house is now a rental property i have built a hundred thousand dollars in equity in that property i saved a much bunch of money by not renting and it sucks that that opportunity is not available to first-time home buyers right now in this market you know again with that that appraisal thing a lot of first-time homebuyers have the seller paid their closing costs right because closing costs can be three to four percent of the purchase price so in a 300 000 house that could be as much as 12 000 and so we usually do is on a 300 000 house we'll say we'll give you 312 000 but we want 12 000 back to go towards our closing costs you really can't do that now because you can't do that as well as offer them 20 000 above list price so that you can get your offer accepted because it's not going to pass the appraisal so it really is those first-time home buyers that are really getting screwed right now and homes are becoming more and more unaffordable and i i hate i hate seeing that i hate working with folks who want to be responsible want to do the right thing and buy you know their first home and invest in their future and they can't um and it's it's it goes back to that k-shape recovery i'm always talking about the people who have money are the ones winning those bidding wars and who are paying 60 000 above list price people who don't have the money are um kind of kind of out of luck right now it's very frustrating uh the dems don't have both houses heck they lost several seats in the house oh i thought they had control of uh congress you know i thought they had the congress and the you know the executive branch and i thought they're gonna um they're potentially it's a flip toss-up seat for the senate but i don't know um good afternoon malcolm i'm currently stationed here in southern maryland hey congratulations saint mary's county yeah that's way down there in southern maryland um beautiful area down there but it's just it's very rural just want to ask your opinion about the market here if you are familiar with it at all yeah i've been down there a little bit um there's not much work down there um that's the kind of thing it's too far to actually commute into dc but yeah yeah st mary's county you have um pax river is the military base down there and that's really like the only big job hub in that area i think maybe some other smaller military bases down there as well but pax river is kind of the big uh city down in that that area so i'm not really sure what the market is down there but i'm um sure it's largely driven by by that military base well house prices go down in the coming year it's possible it's very possible and it it it's directly correlated with this virus it is um i think that in the future we're going to look back and see the that inventory in the market the number of homes in the market there's going to be a direct correlation with the number of daily diagnosed cases so as number of daily cases go up uh you know we're probably going to see a correlation with inventory going down with inventory going down home prices are going up so if we get this whole thing under control and all those people who feel comfort who did not list their homes last year in 2020 they all list their homes in 2021 we're gonna see a big increase in inventory and if we have the daily diagnose cases is way down and we get this virus under control then yeah we could flip it to where we have more sellers in the market than we do buyers and that could cause home prices to go down but there's a lot of ifs in that that statement um and i don't want to make any concrete predictions because i don't know i'm not a doctor i'm not sure how effective these vaccines are going to be and i'm not a um a psychologist i'm not sure how many people are going to take this vaccine you know there's already reports of um uh side effects and everything else like that and i know a lot of people tell me i'm not taking that vaccine i'll probably take it once i get an opportunity to take it but let's say 40 of americans don't take it just for whatever reason that could drag on this freaking virus for a long long time um and inventory may stay low driving home prices up so that that's what you got to watch man if we can get this whole situation under control we will probably see a big increase in inventory and that could cause the housing market to dip um there's a few other factors i'm working on an idea for a video right now of some of the other factors that could cause uh home prices a dip and one of them would be decreasing the number of buyers that we have in the market and i mean i'll be honest man if the government took some steps to artificially decrease the number of buyers in the market i don't think that's actually a bad thing um you know i don't i think a lot of you guys wouldn't think that either right now home prices are becoming unaffordable and that is a big um big deal for a society when home prices are unaffordable and the average person can't afford a home uh canada has been seeing that for years now their average home price in canada is up to six hundred thousand dollars for the average home and all those lower income folks and middle class folks they can't afford homes right now they're just too unaffordable so i would not be surprised if the government if this continued you know i would kind of support the government taking steps to decrease the number of buyers in the market there's a couple ways that they could do that one would just be to require a higher credit score on government-backed loans i think on some of them like you can get an fha loan with like i think a 600 credit score which is not not great at all you can probably pay higher interest probably some other fees but i think 600 credit scores like the minimum what if the government came out and said hey you know what we need to get this market under control we're now requiring a 700 credit score in order to qualify for fha or va loan uh according to that harvard report i broke down the other day fha va loan accounts for 70 of all mortgages out there so the government just mandated a higher credit score that would significantly reduce the number of buyers in the market and that alone could shift the the power in the balance of the market and cause a housing crash you know i like look into canadian market the canadian government is literally trying to crash the canadian housing market they're trying to drive prices down and from a macro perspective that that may be the right move sometimes um so it's interesting to think about that we yeah you know i would i may even support an action like that you know them taking steps to crash the housing market um anyway i don't know where i got with that rant but it's something something to watch very closely wow that is crazy i got to follow up on politics um let's see if they send two thousand dollars to everyone that will highly contribute to more home buyers more down payments and closing costs for people not good for current people trying to buy right yeah so that's an interesting point so if they do that and suddenly we have more buyers in the market that's going to make it even more challenging um and that's why i mean i would kind of support some actions to lower the number of freaking buyers we have in the market or increase the number of sellers just to kind of balance out the market and that two thousand dollars uh so originally they agreed on six hundred dollars which doesn't sound like much but that's six hundred dollars to every like man woman and child or in a household it's my household that would have been like eighteen hundred dollars um yeah trump came out i want two thousand dollars for everybody and like essentially when he says that what he's saying is like the deal is dead i don't the republicans are not gonna agree to two thousand so we're nobody's gonna get anything um until biting comes into the office but yeah if a household got four thousand and maybe another two thousand for the kids so they got six thousand yeah that could help with their closing costs that could help with the down payment so it's very possible we could see more buyers in the market holy cow i got a super chat look at that i've never gotten a super chat before i just enabled super chats on my live streams today and i was asking christina what do they look like on uh on this platform look at that twenty dollars from christina smallhorn super chat um i definitely gotta answer her question so merry christmas my question uh what do you think they're going to do for low-income earners to get affordable housing yeah that is a great question um and like i said before i think that they need to incentivize builders in order to build out um some of these lower income new construction communities i would love it if we saw whole communities of 200 000 homes new construction but those builders are just not incentivized to do that right now they're incentivized to build these six hundred thousand dollar homes you know because they make more money off them and it's probably a lot easier probably a better use of that land to make that the the more expensive homes another thing is that they could invest in some sort of tiny homes or just like free up the restrictions on tiny homes right now the government is like not really that supportive of tiny homes and it's kind of frustrating you know so a lot of these like the forbearance plans and everything those are against um mortgages but a lot of loans for tiny homes they don't consider those mortgages they consider that personal property because it's on like if it sounds like a chassis or something instead of a foundation so yeah i think they need to support tiny homes a lot more to have more affordable options for those lower income earners and if you guys are watching this christina has a fantastic channel all about real estate and she focuses a lot on tiny homes she's got one video 2.1 million views all about uh tiny homes that you can purchase on amazon which is a fantastic um video but yeah i mean tiny homes like we homes are becoming more and more unaffordable people the average person can't afford um homes what are they going to do they need some other alternative um options out there she also has a great video about boxable which is essentially it's like a foldable home that um you can deliver anywhere and like fema's looking into using boxable where they can get these little individual homes set up for like fema camps and stuff and it'd be great if the government would invest in this type of technology and incentivize these types of homes um because we do have a growing number of um uh people homeless people homeless people in this country and so we like we are going to see a wave of foreclosures that's guaranteed to happen and what it's going to happen to those folks they're going to go try to rent properties many of them are not going to be able to rent so a lot of people are going to try to cohabitate with other family members or other families um but the folks who can't do that either they're going to be homeless we are going to like it's almost guaranteed that you can see this playing out that we're going to see an increase in homelessness in the next couple of years um largely driven by this this virus what if the government bought the land and the builders could make the house oh that's interesting yeah if the government bought the land contracted the builders to then build out these communities of very affordable homes i actually would really like that and i think that the the whole permit process is it's also very expensive and very time consuming so i think a lot of builders that say you know if we got to jump through all these hoops and pay ten thousand dollars for a permit in order to build a house might as well get most money as possible as we can but that's another section that they could incentivize them you know the state could absorb that cost or something like that somebody they need a really that we do have a shortage of affordable housing in this country and that problem has just exploded in 2020 um and you know a couple of options the government could step in and try to crash the housing market which you know when the government interferes with the free market it it oftentimes screws things up far worse than um than they fix so them not going that direction instead of going in the direction of building affordable homes and having like there's a big movement after world war ii uh we had a big booming economy at all these world war ii veterans coming back from the war and the government had incentives to build out these large middle class communities that's what we need to do again uh is we need to build out the large affordable housing for the middle class and in lower class i don't really like saying lower class but lower income earners uh adult homes are a pain to get approved and local laws require owner occupancy okay uh let's see i think we had a few other ones here while it's crazy okay um yep and how do you expect the stock market to react to the housing market doesn't correct itself and ultimately crashes if the housing market doesn't correct itself and ultimately crash um i don't think the stock market would really react net that negatively so the 2008 so stock markets in the real estate market is typically uncorrelated typically those two don't uh move at the same time um but in 2008 was a little bit differently different because a lot of these big banks were buying these mortgage-backed securities and buying these loans um and then that cut so the both of them crash at the same time but typically they're not correlated so if the how real estate market starts crashing you're probably gonna see a lot more people taking their money from the real estate market investing it in the stock market uh let's see [Music] many realtors will argue that you argue with you about a wave i don't understand why they think it won't happen yeah i mean so here's the thing like the thing that really has me concerned is uh so so yes we are going to see 12 months worth of foreclosures all get for close down at around the same time whenever these moratoriums are ended like that's going to happen and those foreclosures are probably going to be higher than they usually are because of all the the high unemployment a lot of people are really hurting right now that we are going to see a big wave of foreclosures we may even see a wave of commercial foreclosures as well as a lot of these big commercial strip malls you know all their businesses have been shut down for a long time uk just had another lockdown because of this new strain of the virus um and a lot of people have said that it's a 100 guaranteed pretty much that that new strain is in our country as well and it's far more contagious so we may have another really serious crackdown um but so we we are going to see a big wave of foreclosures now i don't know if that wave of foreclosures is going to be enough to crash the market on their on themselves what really has me concerned is the so we have a reduction of inventory by 20 compared to last year and so that's 20 of all home sellers it's a huge huge number of millions of people who wanted to sell last year but didn't because of this virus they're all going to sell in 2020 if we get this thing completely under control and then you so if you take a look at that and say okay well are those millions of sellers are those going to be evenly distributed amongst the 12 months and it's like no they're not gonna be selling in the winter time or the fall time they typically sell within like a four to six month period a lot of people put their homes on the market in the springtime so if we get this whole thing under control we're gonna have a huge wave of inventory in the springtime now if we don't get this thing under control and let's say 12 months from now we're in the exact same situation that we're in right now which is totally possible then we're just going to kick the can down the road and this huge wave of inventory is going to be a lot worse when it does eventually hit us so like the foreclosure moratorium the longer we prolong that the worse it's going to get and the same thing with this huge wave of inventory that's coming the longer we kind of build up that pressure the bigger the spike in inventory is going to be um and depending on how many buyers we have that's going to influence whether or not it's going to get eaten up or if it's going to crash the housing market you know it's very possible there's a lot of variables too though um hit that like button yeah sure man thanks mavis everybody go smash that like button will you uh thanks new subscriber here all right mavis yeah thanks so much yeah if you guys are watching this on youtube please make sure to subscribe i do a lot of real estate market update videos a lot of breaking down of um real estate market reports and everything i just filmed one earlier today breaking down two reports from corelogic which i found was pretty pretty interesting i'll give you a little sneak peek of that one what they're saying in this corelogic report was that the forbearance if you look at it you would so forbearances essentially you get to skip your mortgage payment for up to 12 months this was part of the cares act and tip and you were supposed to be able to add that to the end of your loan so you would expect that be a lot of the lower income earners and a lot of lower home values that are doing this for parents that's what you would expect but that's not this report found what they found was it was a lot of the um higher home prices higher home income earners that are the ones filing for forbearance and there's a much higher rate of higher income earners than it is lower income earners and so what that means is that a lot of those people they probably didn't really need that forbearance they're really just kind of taking advantage of it and i kind of hate seeing that means that a lot of people really needed it you know they may not have the financial literacy or the financial education to even know what forbearance is and really know that they should be filing for it but a lot of the people who are much more financially literate are the ones who took advantage of the forbearance and i kind of can't blame them i really considered doing it if you guys found for forbearance let me know in the comments because i'm i was on the fence about doing it in the end i decided not to file for forbearance because there's so much uncertainty about how it would impact your credit history like they say that shouldn't impact your credit score but like they they could screw that up and maybe my credit score is fine but it's still on my credit history and if i went to go get a loan to buy another investment property in 12 months could that hamper my ability to get qualified for a new loan so because of that i decided not to file for forbearance and take advantage of that but this report from corelogic shows that a lot of the higher income earners did take advantage of that that was 30 percent i think other people filed for forbearance where the higher income earners and also kind of shed some light on how many foreclosures we can expect so there's 2.8 million people on forbearance right now but a large percentage of them we're just doing it just to take advantage of that money so even if forbearance end we wouldn't see 2.8 million foreclosures it'd be a much smaller number uh do you use a recommend or recommend um inflate banking for real estate purchase inflate banking for real estate purchase uh i don't know is that is that a banking is that a private company um and so are you talking about getting a mortgage um if you're talking about getting a mortgage generally i don't like i have had bad experiences with all the big box companies bank of america veterans united usaa wells fargo all these big box um bankers lenders mortgage lenders you know a lot of them just have like one big headquarters and they got a warehouse full of lenders and they just kind of pass you around and a lot of them um they don't have the best customer service when you're actually getting the loan and they can be a real pain the pain the neck um and a lot of them right now they're taking longer to qualify for a loan so and that's something to really look at is if typically closes alone closer to 30 days but like i think bank of america saying well now they need 45 days and that's making your offer far less competitive so typically i recommend that you ask your real estate agent or find a local lender in the area where you or get a referral for a specific lender not like oh yeah go with wells fargo bank of america like no find a specific lender get a recommendation for a specific lender within those companies that is reliable a bad lender can really screw up a deal a bad lender can cost you a deal absolutely um so if that's what you're talking about yeah man take your time finding a lender you really need a good lender and your real estate agent can recommend a good quality lender to you i'm a uh i am a signing agent singing agent signing agent i'm dyslexic and i want to get into real estate what is the best way uh to do so oh fantastic yeah you know i've been a real estate agent now for about four years and i did it my first year i did it part time i did one year while i was still in the military and essentially i just failed a lot that first year and i'm glad that i did that because um that way by the time i got out of the military i could hit the ground running i wasn't going to make all those failures so yeah i'm assuming you're talking about um getting your real estate license right i want to best way to do so agent want to get into real estate well yeah so you're talking about getting your real estate license um honestly i wouldn't be opposed so in real estate you can join a team where essentially you work underneath of another agent they kind of show you the ropes and then they take a big portion of your commission um but i i'm not opposed to people doing that their first year in real estate because real estate has an 87 failure rate real estate agents 87 of the people who get their real estate license do not renew their license four years later when their license expires so it is a high high number of people who fail at this business but it's a high risk high reward job and if you can figure it out you know then you get to work from home and you know make some really good money and be your own boss and i mean i love it i love the flexibility in real estate um you know because you have to it's it is running a business just like any other business being a plumber being a handyman being a contractor you need to generate business but what i love about real estate is the flexibility in you get to decide how you generate that business and you know i generate my business from making youtube videos like this one christina smallhorn she does the same thing she makes great youtube videos and that's how we get real estate clients um and there's a bunch of other techniques that you can use but that's what you gotta figure out um but that's anyway yeah uh real estate's a cool business if you can figure it out hey from dmv area all right go dmv um i'm a new realtor in the dmv great content yeah thanks so much man um i'm in maryland you know i'm over in annapolis um so yeah let me know if you have any questions about real estate man congratulations welcome to being a real estate agent man it's it's it's it's it's a fun job it also kind of really sucks sometimes honestly you know the uh yeah it's it's it's an interesting job hey antonio how's it going i've uh really been considering getting my realtor license let's see where was i lost my infinite banking concept oh infinite maybe i read that wrong i don't know what infinite banking concept is uh so where was i where was i here here hey antonio i want the real realtor commissions i see they they make ten thousand dollars plus per home uh yeah so you can man you can make a lot of money i i literally know people who are millionaires from being real estate agents but the average real estate agent look this up the average real estate agent makes about forty five thousand dollars a year the average real estate agent doesn't make a lot of money um so yeah i i have you know times where i make ten thousand dollars but the the crappy thing is that you have to have a brokerage that you're a part of and they take on a lot of the risk and responsibility if you screw anything up and like my brokerage they take 35 of everything that i make until i pay them 30 000 a year um and so that's called capping a lot of agents don't ever cap i i mean i i always cap but a lot of people don't so you know you as a seller you may sell your house and say man i just gave that real estate agent ten thousand but really thirty five percent of that so three thirty five hundred dollars right off the bat went to my brokerage so then i'm left with you know um sixty five hundred dollars of that 10 000. and i'm a company i'm a private corporation so the i pay taxes on that usually about 30 percent so that's another 30 percent of that 6 500 that's taken off and then i have all my business expenses as well you know i was renting an office for 500 a month and i have i pay 190 a month just for my website and a bunch of software um i pay thousands of dollars a year in various software some of it that's required that i have so yeah you see ten thousand dollars but there is a lot of other business expenses that go into that a lot of people they yeah they have a little bit of a misconception about how much real estate agents actually make um but the average real estate agent makes about forty five thousand dollars a year um i'm making about about two hundred thousand dollars a year right now the last two years so 2020 2019 i'm making about 200 000. um 2019 i did 30 transactions uh my average commission after my brokerage took everything was about 7 500 sometimes 30 transactions you know i made pretty good money this year um i'm actually doing fewer transactions on purpose because i'm spending more of my time doing like youtube stuff and i'm i'm referring out a lot more my business but i'm still bringing in somewhere around 200k this year um and i'm making about that's including about twenty thousand dollars that i'm making from youtube itself from these videos that i make from on the ads that are played on there so you can definitely make a lot of money pretty good commission as a real estate agent but just keep in mind that it's almost a ninety percent failure rate ninety percent of the people get out of this business and majority of people make about forty five thousand dollars a year so it's a high risk high reward job um and it can be very stressful it really can be it sometimes a flat out sucks um right now it kind of sucks i work with a lot of buyers and right now the number of buyers well it used to be i'd have a buyer show them a few properties they have a house that they like i submit an offer and like 75 of the time that offer would get accepted and then we kind of move on from there right now i'm submitting like two or three offers per client which means i'm showing them like three times as many properties so the amount of time that i need to invest into a client before i ultimately get one under contract and optimally get paid is far far higher right now so it kind of stinks right now being a buyer's agent um i mean that's just that's just the truth of it and you know a lot of people that look at real estate agents and they're like oh man they make so much money and they barely did anything what you got to understand is so when 2019 i did 30 transactions i probably talked to no joke about 300 people who said that they want to buy a house or sell their house about 300 people and only about 30 of them actually led to me getting a paycheck and that's a big part of this is just talking to people providing consultations showing people property working with people before you ultimately buy get ultimately get paid so there's a lot of work that you have to put in in general before you finally get one client that actually actually pays you um but yeah if you want to talk more about real estate you know my email address is actually all my contact information is in the description of all my videos so i'd be happy to talk to you any of you more about becoming a real estate agent you also have to choose a brokerage i really am a big fan of keller williams um and i'd be happy to talk to you more about keller williams if you guys want to go talk about that route okay uh it's tough but if you are consistent and find a broker with a great training you can be successful yeah absolutely and it's a lot of flexibility you know so my son has a lot of uh he's got autism and intellectual disabilities and that was a big motivator for me to get a job that i can work from home and it provides me tons of flexibility with him so if i need to go up to johns hopkins up in baltimore one day with him you know i can do that if he's up all night i can stay i have flexible hours for me to work with my son so it provides you a lot of flexibility which is something that's really valuable to me and i get to work from home most days infinite banking uses insurance policies um too as a bank account to make large purchases oh interesting yeah i'm not really familiar with infinite banking i'll have to look into that um i'm always losing my my spot here i think that it depends on how you were who you're who who you're talking to in the big bangs a more experienced lender um will be at a big bank will be better yeah so i mean it's just that yeah you want to find a lender specifically and look for a referral for a specific lender within the big banks a lot of these big banks um how the lenders get paid they get paid far less than if they were an independent lender so they're incentivized to not work with as many um clients they can't provide as good of quality in my opinion you know i mean there's just a couple different models out there you could work with the lender who um gets the leads themselves and only has a few clients but he gets to keep the full commission or he can work with the lender that they're getting all their clients from wells fargo and they're only getting a small portion of the overall commission that they would have gotten and that means they have to work with like 40 people at a time like no joke there's lenders who have like 40 transactions a month but they're making a lot less money in each of those versus a lender that may only have five to ten transactions a month but they can invest more time in each of those those clients same thing with real estate agents you know um if i can do two or three clients a month i'm happy with that but there's you know like redfin agents where redfin gives those clients to their agents and those agents they have to work with like five times as many clients and make the same amount of money um if they could generate those clients themselves so they they just can't provide as much they can't invest in as much time in each of those clients um and so this is some something to consider that i'm not a big fan of a lot of these big backs big box lending companies i personally had some bad experiences with them as an agent and even as a consumer so keller williams just rolled out with their own big box lending company called keller mortgage and they're really pushing it down on us i'm a keller williams agent um and i was like okay okay um i'll recommend it to a few my clients and then i bought this house using keller mortgage and it was a terrible experience it was awful i oh i can't believe i ever recommended that company and i'm like no i'm done not recommending them ever again i've got a few specific lenders in my area that are super super reliable and that's all i'm recommending my clients moving forward avoid the loans by being your own bank like nelson nash yeah we don't all have as the cash to be your own bank um let's see i'm closing it alone for a client on wednesday who was turned down by b of a bank of america they wasted two months of his time we are getting the deal done for him so a lot of times yeah so a lot of times these big banks bank of america they have a very narrow box that if you don't fit in that narrow box they're not going to approve you and it kind of sucks um like i work a lot of first-time home buyers that they'll tell me oh yeah i applied somewhere and they said i couldn't get approved and i was like oh already applying is one of these big box companies big big banks um and like they decline a lot of people that other lenders would approve they're just very their requirements are much more strict than a lot of other lenders so i tell people like no no you can get qualified for a loan you just went with one of the big banks who are very very strict on who they qualify let me go talk to my guy over here and um you can probably get your approved or carlo carlo here could probably get you approved as well if bank of america declines you uh okey says whoa i don't know that failure rate oh yeah 87 percent of real estate agents fail this business and get out um it's it's yeah it's it's it's a tough tough business man but i mean there's plenty of people very successful at it um it's it can be a great job maybe i'll do a whole another live stream one day just talking about that um just being a real estate agent 87 is real my first year is tough and i am part-time i'm gearing up for 2021 that's great yeah so you know i got out of the air force july 2017 and i got my real estate license 2016 and i tried a whole bunch of stuff in 2016 to generate business that's the hard part it's just generating the business um and i failed at all of it but by the time i got up and sort of um got out of the military i was able to hit the ground running and surprisingly one of the things i was very successful at was youtube making these youtube videos and i started those in 2016 while still in the military and luckily you know we have a lot of military bases here in maryland so i was able to work a lot of those service members that are stationed out there to help them buy homes uh the fees are super expensive to be a real estate agent they definitely are it's ridiculous and a lot of people don't don't see that up front a great channel great content thank you malcolm i'm just north of you in timonium by the way we have 48 hours uh underwriting turn time right now yeah thank you carlo um yeah okay so timonium that's not too far you got timonium fairground up there uh thanks for the breakdown yeah no problem malcolm how many deals are you getting as a result of your youtube channel uh yeah quite a few um i think last year 2019 i did like 10 deals or so as a result of youtube um i did a little over a hundred thousand dollars in gci as a result of youtube this year is a little bit different because i'm literally trying to do fewer deals so i'm referring out a lot more of my deals but i get people reaching out to me all the time from my youtube channel who are interested in buying home uh that i can refer around you know maybe two to three sometimes three to five a week right now it's a little bit slower but yeah sometimes you know three to five a week uh what is your opinion about wholesalers and real estate agents working as wholesalers yeah you certainly can do that wholesaling is not an easy thing that you know a lot of people tell me oh yeah i want to start wholesaling and then i'm going to get into flipping and taking my profits from flipping i'm going to turn that into buy and hold deals and you know it's like they went to some kind of seminar and they paid a couple hundred dollars to have somebody tell them the secret model of getting to wholesaling and then getting the flipping and then you know buying whole deals and then you're a millionaire but all that is very very difficult wholesaling is not easy because and flipping is not easy either most flippers find off market properties most the properties 99 of the properties on the mls will not make good flips they won't the numbers won't add up so flippers have to find properties off market properties and same thing with you if you want to get into wholesaling and for those who aren't familiar with the term wholesaling essentially he would find somebody who would want to sell their house negotiate a deal get it under contract at a very low price at a price that he could flip the home but he's not gonna flip it himself he's then gonna sell it to a flipper and maybe make five thousand ten thousand dollars off the property so he's essentially just going out finding these great deals for flippers and it's not easy a lot of people online make it seem very easy but i mean good luck with you if you can pull that off especially in this market right now in this market i imagine it's much more difficult but if you yeah you want to get a wholesaling give it a try but it's that if real estate agent has a 90 87 failure rate i'm sure wholesalers have a much higher failure rate uh my kids have chronic health issues so i hope to use real estate as a way providing flexibility in my schedule yeah absolutely i mean that's exactly why i got into this you know i was in the so my son's five right now and you know he's got intellectual disabilities and i was in the military when he was born in the first few years uh like he woke up every single night crying and screaming um and i was in the military i was working at the white house at the time and i used to travel all around the world um with potus and i used to be gone for two weeks i'd come home for a few days be gone for another not two weeks and my wife was just going crazy she couldn't handle that schedule with our son with all the disabilities and all the doctors appointments and so i made the decision to get out of the military um and i was like okay i gotta find a white-collar job because i got a bat back so i had to have to find a white-collar job with flexible hours that can pay pretty well and i landed on real estate um and it you know you have to hustle on it you know that's the thing you have to hustle um and i got out of the military i got into real estate and i've been hustling ever since and um it's it's working out pretty well for me uh last so 2019 i did 30 transactions that was a little much then my wife started complaining i'm spending too much time doing that and not enough time home so i'm trying to design my life again and in 2020 i try to do fewer transactions and do more stuff here making content on youtube in order to earn some income um so yeah i mean i love the flexibility that it gives you uh it's still a lot of challenges still not easy but it's it's definitely it can be a very rewarding it can be a very rewarding job i mean i have a lot of people are so appreciative of me helping them and explaining the process to them and advising them uh you know about different things about financing and about buying a home and mortgages and everything so it can be a very rewarding job weird question how much liability do you need as a percentage of rental home value how much liability do you need as a percentage of a home i don't even know man uh yeah so you're talking about insurance i'm guessing nope i couldn't tell you uh is is is wise is it wise to wait to buy a foreclosure house uh if it's your primary residence i'd say don't try to time the market um if you're looking to buy an investment property then yeah like there's gonna be some huge investment opportunities coming up in the next 12 24 months um i'm and i plan on my foreclosure house my last home that i bought was a short sale so short sales are that they're you can't make their mortgage payments they're going to be foreclosed on but they're essentially saying to the banks don't foreclose on me i'll find a buyer to buy this house for what i owe you the banks um and i bought my last home as a short sale and we literally bought it for about a hundred thousand dollars below market value and then we sold it about three years later and took out that hundred thousand dollars so yeah for closers and short sales you can definitely get some pretty good opportunities um with them um but if you're ready to buy a house i mean i would just try to buy a house now don't don't try to wait and try to time the market unless it's going to be an investment property how do you handle health insurance um i don't really know my wife i told my wife to figure it out she bought us some health insurance she kind of handles that um am the man yeah you're on my last live stream um do you believe we are in a deflationary or inflationary period um uh i guess like we do you mean like the economy um i mean our money is obviously inflating and losing value um i think our economy is oh man i you know man i i've kind of lost faith in everything that i believed about our economy it didn't it doesn't make any sense like all these companies going out of business but the fed is just printing money and the stock market is going up and i've i always thought there was going to be another big stock market crash and that's like waiting to invest but i think now i don't i don't think there's going to be any more big stock market crashes like if the fed has shown that the stock market goes down they just need to print money out of thin air and they can keep it up like indefinitely and we may see the stock market go up up up up and up some more you know um yeah so i i've kind of shifted my thinking around the stock market in our economy what is the effect on real estate um so yeah inflationary versus deflationary i mean if you're talking about our currency in inflation in the u.s dollar um the real estate market typically outpaces inflation like if you went back and looked at those two charts is very rare that it doesn't outpace inflation um and so i you know i guess i need to look at a little bit closer those two charts and see but typically if inflation goes up i think home values are going to go up as well um and so i think it's a good hedge against inflation is only owning real estate it's a relationship business that has long-term results it definitely is a relationship business people work with you because they like you they trust you they know you um it's not not as easy a lot of people think that oh you just go show properties that you have to build relationships with people to get them to to want to use you what is your point of view in regards to cold calling for marketing your real estate business i hate it i hate it i hate it so as a real estate agent since i'm a business other businesses um there is a do not a do not call list for me and people other businesses can spam the heck out of me man and i get so many cold calls it it ruins my life the number of cold calls that i get as a real estate agent you know when i first got into this business um i put my phone number everywhere online i put it all over the place and all these different forms and websites hoping to get some business from them and all i get is just spam calls like three to five spam calls a day and every day i'm just like nope i gotta go in here and block all these people i oh god it ruins my life the number of spam calls and spam emails that i get so no i'm not a fan of cold calling uh people because like i hate it so much it was just a matter of principle to me um there are some agents who have a lot of success with that um i think that it's the it's nowhere near as effective as it once was and it's kind of like diminishing the effectiveness is diminishing there's so many other things out there if you're a real estate agent man um christina smallhorn and myself have a facebook group called real estate youtube mastermind it's all about using real youtube like this to generate business for your your real estate business um and with this like you're providing value and attracting people to you you're building relationships with them uh it's a much more satisfying way to generate business than it is to cold call people uh thank you you are providing such valuable information yeah thanks so much aoki i got to do more live streams like this i'm kind of enjoying them what do you think about using the va loan in the current market yeah absolutely go for it man it is a little bit more challenging um because the va does have a little bit more restrictions and requirements when you're using it um that some sellers if they had two offers one was a conventional one was a va and all things were equal typically the seller's gonna go with the conventional because that va loan appraisal can be um a little strict sometimes and so they may see i think it's less headaches but i i've got uh a va loan under contract just a couple days ago um and there's six offers and we still got our va loan under contract one thing i recommend is that you guys write these personal letters to the sellers um i have a video about like 10 tips or 10 hacks to get your offer accepted go back and watch that video um it has all my my tricks in there to get offers accepted um guys hit that like button is that spam that may be spam oh he got me he fooled me i got so much spam on these youtube videos and these these commenters are getting really elaborate and they'll leave a comment and then have a bunch of other spam accounts comment below that comment uh but it's all just spam i'm pretty sure this guy's spam guys hit that like button uh mavis if you're not spam comment that you're not spam but i'm pretty sure you are oh wait that's the reason i think the crash is on the horizon you know what though man comment that i'm not spam because some of these um people man they can even even they get really elaborate they they they search for keywords in your description and then they comment relative things to it i get in real estate as a result of having five kids and needing more flexibility i hear you malcolm yeah absolutely uh i mean i i love that i can work from home and work my own hours i can work from holidays or i don't work from holidays you know your income is directly proportional to you know how much you work so you can kind of if i don't want to make as much money you know i don't want to work as much um yeah a lot of flexibility that's the reason i think it crashed on the horizon i think he's spam oh no he's not he's a real person i just [Laughter] i'm sorry man you're a real person thank you for commenting that so there's uh i if you go look at my my youtube videos i've i'll see like the same comment over and over again uh on different videos and they have there's one that has a whole bunch of emojis on it um all right see that's the problem with cold calling as well man it's just spam cold calling is spam and i don't answer my phone sometimes thinking it's spam but it's really a real estate lead same thing with these spam commenters now i'm thinking real people are spammers that's why i don't like cold calling i use media share as my health care coverage cool uh there are also they also have uh discounted pricing for dental envision we have a family of five and that's how we do it over our emergencies uh yeah cool that's good good info i let my wife handle health insurance so i'm not even sure what you know my brain is so deep into real estate and youtube and all these things i just i don't have the mental power for some things like reals for like health insurance and life insurance and i just kind of let my wife handle those things um i believe oil prices are invariably proportional to real estate in the current pandemic interesting theory our thesis um people are staying home working from home due to the pandemic as restrictions left real estate we're going okay so yes that is a very good um yeah there probably is a correlation with that with people staying home and consuming less oil and less gas um yeah probably not a great time and airliners as well are not consuming any gas the cruise liners are not consuming any oil so there i haven't been tracking oil um investments but they're probably really hurting right now i would not be surprised about that at all with the power of social media you don't need to cold call if you know what you're doing yeah very true man very true social media is is is where it's at you know cold calling is still like 1980s it was probably super super effective in the 1980s and i know i know agents that do cold calling right now and they you know it it it's it's like miserable like they literally cold call like eight hours a day but it's like a proven proven model and if you cold call eight hours a day yeah i'm sure you'll get some business from it but it just seems very soul sucking you know sold my home in october 2019 it says hitting a pullback oh no then this happened which is fine on the sideline with 300 000 cash perfect credit and six figure income people are buying blind houses are overvalued yeah they are overvalued yeah so you're trying to time the market and it didn't didn't pan out quite well i i'll admit man i seriously thought that there was going to be a major stock crash stock market crash right i watched all these damn youtube videos saying oh there's a stock market crash every seven years we're now 10 years into this bull run there's going to be a major stock market crash and i i did not invest very much at all in the stock market um for the last 10 years or so and i missed out on the biggest bull run in united states history um and now they're saying that the next 10 years is probably not going to have nearly as much of a return in the last 10 years if you just invest in s p 500 index fund you'd see an average eight to nine percent return on your money which is amazing and mind-blowing and i did not because i was trying to time the stock market and i always thought there's gonna be a a really big crash um and so it happens man and i'm done with that i'm dollar cost averaging into everything i now honestly believe that everything's just gonna go up up and up on the long on the long run you know so i same stock like watching the federal reserve just printing cash and just driving up the stock market i that totally everything that i thought i knew about investing just went out the window you know you see all these companies are going bankrupt and all these people losing their jobs and the s p 500 is increasing in value it didn't make any sense and i'm just kind of done and i'm just dollar across averaging into the stock market nowadays um you can time the market yeah i think you can i you i just don't recommend it um you know i i'm i'm really focused on the cryptocurrencies right now bitcoin is going to have a huge year in 2021. it just reached this new all-time high bitcoin runs in these like four-year cycles which are very predictable um it reached an all-time high in 2017 the 20 000 had a pullback he just passed 20 000 and it's it's i seriously think bitcoin's gonna 20x in the next um 12 to 24 months and i'm not i'm not even joking about that um i'm hoping to be a millionaire in 24 months from now from bitcoin but we'll say so i am trying to time that market um but when it comes to real estate i don't i just don't recommend people try timing it it's very very difficult how about the vicious the physician loan um how about the physician loan i'm not familiar with the physician loan zero down no pmi that's fantastic that's like the va loan zero down no pmi and the man says i'm not spam that rhymes thank you i am the man for not being spam uh definitely not spamming i just subbed appreciate that man appreciate the info and i think others should should show their appreciation by liking hey man i appreciate that yeah i don't do very many live streams so if you guys like this you want to see me do more live streams like this uh show me some love man hit that subscribe button hit that uh like button i gotta cut this short though man we're up to almost an hour and 40 minutes so no more comments guys no more comments let me run through these last few here true others need to like the videos since he has really given us jewels of information yeah thanks so much man i appreciate them you know i'm like i'm just a pretty analytical guy um and i like just really diving deep and analyzing things and i've been kind of i don't know just having fun analyzing the market look at that i got another super chat i just turned super chat on today i really appreciate it so you guys know with super chats your your comments get highlighted and you're essentially donating to the the channel check out celsius network seriously awesome celsius network uh elaborate for us man what is celsius network it kind of sounds familiar is that something something to do with bitcoin that sounds familiar man well i appreciate the two dollars uh where was i if you have one rental property with lots of equity what's best way to get second rental property money down payment etc uh yeah i mean right now you could definitely look into a cash out refinance on that property with rental properties they're the like the um what well what's it called there's a percentage of like loan to value of the property and it's usually much higher so they want you to have more value more equity in the property for them to loan you any money um than if it was your primary residence but you definitely look into cash out refinance see if you refinance pull out some of that money use that money as a down payment that's something that you could do and then i don't know if there's any sort of um you really need to speak to a lender speak to your bank and see if there's anything that you can do it really depends on how much equity you have in that property and what kind of rates you're you have on that looking to start my own tax firm very cool man any advice on locking in a lease for multiple years i'll begin searching in february and some people say you can get low rates with less demand for commercial spec um yeah no i don't really do a whole lot of commercial properties honestly but i would imagine that a lot of like shopping centers are really like hurting right now um just because uh so many companies have gone out of business so many small companies so you probably can get some good um rental opportunities uh for some commercial leasing right now buy bitcoin yes please do man you know usd loses value every day yeah inflation inflation guys it uh it's an inflationary currency bitcoin is a fixed price um and i really do think that bitcoin is going to be a global standardized currency one day use all across the the world like in 10 years from now it'll be widely accepted um but you know what's going on right now is you have these big corporations that are buying tens of millions and hundreds of millions and billions of dollars in bitcoin i'm not even joking about this paypal right now they recently allowed um their you to buy and sell bitcoin and or exchange bitcoin using the paypal app so anywhere paypal is accepted bitcoins is essentially accepted now too that was just recent and paypal is literally buying tens of millions of dollars worth of bitcoin like every single month um square which is another cash application they're buying tens of millions and hundreds of millions of dollars of bitcoin there's this one big insurance company that bought um over the last 12 months they said they bought 1.3 billion dollars worth of bitcoin an insurance company and uh there's even rumors and speculation that tesla may take some of tesla's excess cash and buy bitcoin with it just as like a store of value so where this bull run in the cryptocurrency space is very different from every single other one because we have these large institutions buying hundreds of millions of dollars worth of bitcoin where the other bull runs are really driven by individual consumers people like you and i buying a few hundred dollars a few thousand dollars of bitcoin this one has large institutions buying hundreds of millions of dollars and it's actually kind of a shortage right now they're having a hard time like if you wanted to buy a hundred million dollars for the bitcoin that's not an easy thing to do i'm telling you man bitcoin is going to explode in the next 12 months um i'm very confident on that and i'm gambling quite a bit on it i don't think we're going to get the real estate correction people are expecting like 2008 no i don't think it'd be like 2008 either the market is different this time because of the equity yeah so that's a great point that because home values have gone up so much a lot of people have equities a lot of equity in the property a lot of people could benefit simply by refinancing their homes so a lot of people could save money by refinancing or they could pull out some of that equity um oh no bitcoin oh yeah man all right guys i i got a bunch more comments i really appreciate all the feedback guys i gotta get going though i'm up to almost two hours i can actually hear my son upstairs fossen and i know my wife's gonna get get on my my case here soon um but yeah mitch edgar he gave me a super chat so let's see uh he's saying check out celsius network basically a crypto bank i know you said the s p 500 return average eight percent over the last decade yep uh currently you can earn a 10.5 on usdc on celsius the ceo is a savage super strong community yeah so usdc is a so there are things called stable coins so you guys aren't familiar with it where it's a cryptocurrency but it's paying to a like a fiat currency so usdc is like pegged to a dollar so your money's worth about the same so essentially if you go into one of these exchanges you exchange your money for a usdc coin he's saying you get a 10 return on that which is yeah pretty amazing um there's another one called block five which i'm super excited about uh well i'm super interested right now and block five you can actually get up to i think like six or eight percent apy on your on your bitcoin so you can hold bitcoin get that appreciation and also get a really high interest rate on that one second aiden come here buddy i'm almost done my kids outside my door um so block fives one two where you can get a interest on your um yeah but yeah man getting this 10 interest or getting interest rate on block fi you can definitely get a better return than your bank will pay you they're paying you what 0.1001 so i've never heard of celsius um i use coinbase and then i have some on um gemini as well so two us-based currencies i also have a binance account just because finance you know you get a lot of these alt coins that you can't get anywhere else but uh okay guys hour 45 minutes i appreciate all the questions all the conversations make sure you guys subscribe if you're not subscribed yet and i'm gonna try to do this more often you know javier vadona he's another real estate agent a great channel you gotta check out he does live streams like two or three times a week so i i may start doing that more often um especially those super chats i appreciate you guys happy new years merry christmas happy holidays and i'll see all of you love you later bye

Channel: Malcolm Lawson - REALTOR

Views: 3,530

Keywords: Real Estate market, Real Estate, Market Crash, Real estate market crash, real estate market update, real estate investing, investing, money, market, housing, home prices, home values, housing market crash, housing crash, real estate crash, Malcolm Lawson, buying a home, selling a home, real estate, real estate agent, housing market

Id: qrU2XM2ZF3M

Length: 104min 44sec (6284 seconds)

Published: Sun Dec 27 2020