Speaker 1: Episode one, six Tips for first time home buyers. Welcome
Speaker 1: to the Brugal Friends Podcast, where you'll learn to save money,
Speaker 1: embrace simplicity, rice and liver with your life. Here your
Speaker 1: host Jen and Jill Do Do do Bad. Welcome to
Speaker 1: the Singing Friends podcast. My name is Jen, my name
Speaker 1: is Jill, and we have quite the show. I hope
Speaker 1: that you have a long drive, or you have buckled
Speaker 1: up for a really long house clean or whatever. Give
Speaker 1: us your time today. You won't regret it. It is
Speaker 1: worth every excited for Scott A. Mended to be on
Speaker 1: there from Bigger Pockets. We just wrapped up the interview,
Speaker 1: which is why we can know that you can be
Speaker 1: excited about it and that we just covered a lot
Speaker 1: of really great content. So yeah, if you are looking
Speaker 1: to buy for the first time, buy home for the
Speaker 1: first time, this is great. Even if you own a
Speaker 1: home and you are looking to buy again, this is
Speaker 1: really great information and you will get a lot out
Speaker 1: of it. So before we get into the episode, let's
Speaker 1: hear word from our sponsors. We've got the Frugal Friends
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Speaker 1: also created to be gone through in pairs or small groups.
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Speaker 1: Do it? Yes? And this episode is also brought to
Speaker 1: you by Surprise not really Surprises, the sponsor of today's episode.
Speaker 1: The surprise that comes with a call from your landlord
Speaker 1: telling you you have six weeks to get out of
Speaker 1: his duplex or the surprise that comes with being outbid
Speaker 1: on every single house you put an offer in on,
Speaker 1: and the surprise that your wife has gone under contract
Speaker 1: with the house you haven't seen yet. Surprise. It's the
Speaker 1: spice of life. So they say, this is such a
Speaker 1: good sponsor, thank you. Surprise. We talk a little bit
Speaker 1: about this in the Lightning Round today, except you didn't
Speaker 1: mention in the Lightning Round that you put an offer
Speaker 1: in on the house without Travis knowing. You just came
Speaker 1: home one day and said, we have a house, which
Speaker 1: I I mean, I went under contract. That's a different
Speaker 1: that's that's further so we said, but it all worked
Speaker 1: out in the end, and that is a that is
Speaker 1: a recurring theme that you will get from today's podcast.
Speaker 1: So first, if you want to queue up a few
Speaker 1: episodes to play after this. If this one wasn't enough,
Speaker 1: maybe you want a road trip, definitely head back to
Speaker 1: episode sixty seven. Episode sixty seven, when buying a house
Speaker 1: is the frugal move. We have so many episodes. Episode
Speaker 1: eighty how to get other people to pay your mortgage
Speaker 1: with Craig cure Lap that on was about house hacking,
Speaker 1: and then episode one, how to save money when buying
Speaker 1: a house or refinancing, so really great ones to que
Speaker 1: up to play after this. But for today we are
Speaker 1: talking to people who definitely want to buy a house,
Speaker 1: and we have If you are familiar with real estate
Speaker 1: at all, you may have heard of Bigger Pockets. So
Speaker 1: we have Scott Trench, the CEO of Bigger Pockets, and
Speaker 1: Mindy Jensen, his co host on the Bigger Pockets Money podcast.
Speaker 1: It's one of the top personal finance podcasts consistently in
Speaker 1: the top one hundred on Apple's iTunes. Lots of great information,
Speaker 1: lots of very wise guests, and gosh, Scott and Mindy
Speaker 1: themselves have so much wisdom, especially when it comes to
Speaker 1: real estate. Mindy is an accomplished real estate agent. Scott Trench,
Speaker 1: author of Set for Life, is seasoned house hacker and
Speaker 1: real estate investor. It's just there's so much goodness in
Speaker 1: the hot seat today, super fun and relatable. I know
Speaker 1: that you'll get a lot out of this today, So
Speaker 1: really pleased to offer this to you. Scott, Mindy, Hey,
Speaker 1: Mindy and Scott, thanks so much for coming to the
Speaker 1: Frugal Friends podcast and sitting down with us. And we
Speaker 1: have four people. That's this is a full podcast. I'm
Speaker 1: so excited to be here right, Thank you for having us. Yes,
Speaker 1: so many faces on this call, so many voices, and
Speaker 1: we fund for the listeners to get it all straight.
Speaker 1: Glad to have you all. At least they'll be able
Speaker 1: to tell which one is Scott at hopefully. Yes, we've
Speaker 1: never been mistaken. Yeah, we get switched all the time.
Speaker 1: Nobody knows which one is Jen or Jill. But we
Speaker 1: are so excited to talk about home buying, especially specifically
Speaker 1: first time home buying, because I know at Bigger Pockets
Speaker 1: they talk a lot about like real estate investing, but
Speaker 1: you guys over at Bigger Pockets Money are talking about
Speaker 1: the money and the finances to get you prepared for investing.
Speaker 1: In a lot of times that comes with buying your
Speaker 1: own home. For so we're super excited to just like
Speaker 1: pick your brains. You guys have so much knowledge and
Speaker 1: it will anybody listening will be really benefited, whether you
Speaker 1: have your own home now or you're looking to buy
Speaker 1: in the future. We want to talk today a little
Speaker 1: bit about first time home buying. We've done a few
Speaker 1: episodes on this topic before, and so this is who
Speaker 1: we want to talk to specifically, today and curious to
Speaker 1: hear from both Humanity and Scott what what is a
Speaker 1: good strategy behind purchasing a first home. You should know
Speaker 1: that it is not a jump right into it with
Speaker 1: both feet. Oh I think I'm going to buy a
Speaker 1: home today and tomorrow you're signing papers on an offer.
Speaker 1: You need to do some research because this is a
Speaker 1: multi hundreds of thousands of dollars decision. And to make
Speaker 1: that decision because you really love the carpet in this
Speaker 1: one house or the mantle place in that other house,
Speaker 1: that's not the best way to make a financial decision
Speaker 1: that is hundreds of thousands of dollars that you can
Speaker 1: have an impact on your ability to grow your wealth
Speaker 1: for decades to come. You need to do research. You
Speaker 1: need to make a calm decision, and you need to
Speaker 1: know that. I mean, I'm and I'm assuming that you
Speaker 1: have already gone through the is it a better choice
Speaker 1: to rent or is it a better choice to buy? Thought?
Speaker 1: So starting from the yes, it's a better choice for
Speaker 1: me to buy my home now is when you start
Speaker 1: making your start doing your research. Because not all homes
Speaker 1: are created equally, not all purchases are created equally, and
Speaker 1: making the wrong purchase choice can have lasting impact on
Speaker 1: your financial future. Yeah, and all outt on. They're one
Speaker 1: of the biggest things that come into the buyer's rent
Speaker 1: decision and the strategy around home buying, which is obviously
Speaker 1: very heavily interwoven with that is the closing costs associated
Speaker 1: with buying property. You have one or two they of
Speaker 1: the closing costs that you pay on the buy side
Speaker 1: with inspection, araised, old title insurance UM and all that,
Speaker 1: all the kind of goodies that go along with that.
Speaker 1: And when you sell the property, you're gonna probably pay
Speaker 1: seven or eight percent of the properties value in closing
Speaker 1: costs when you when the seller typically pays both the
Speaker 1: buyer and the listing agent and that kind of stuff.
Speaker 1: And so that is the root of the strategy of
Speaker 1: home buying is which how do I make it less
Speaker 1: expensive than the renting alternative as quickly as possible? And
Speaker 1: for that you have there's like three exit options that
Speaker 1: you should think through when you're buying your home, right
Speaker 1: and those three exit options what that's what you're gonna
Speaker 1: do with the home that when you exit, like at
Speaker 1: the end state after a certain number of years go by,
Speaker 1: and those three exit options for most people are going
Speaker 1: to be one of the following three. One, I'm going
Speaker 1: to uh live in the property happily ever after. This
Speaker 1: is what most people overweight when buying a home. They
Speaker 1: think that this is much more higher probability than it
Speaker 1: actually is. The second is, I'm going to rent the
Speaker 1: property out and place a tenant in there after I
Speaker 1: move out, and I'm either gonna and I'm to rent
Speaker 1: it and I'm either going to cash flow it or
Speaker 1: I'm gonna subsidize my tenants lifestyle because I'm gonna bring
Speaker 1: in less rent than it costs to maintain the property.
Speaker 1: And the third option is to sell the property, ideally
Speaker 1: at a gain. And so the strategy comes down boils
Speaker 1: down to how do I buy a home? And your
Speaker 1: there's puts and takes in all of this, but how
Speaker 1: do I buy a home that gives me the most
Speaker 1: satisfactory blend of all three of those exit options? Right? So,
Speaker 1: to buy for renting or for buying to be better
Speaker 1: than renting, I have to generally speaking live there for
Speaker 1: a long period of time. But I don't really have
Speaker 1: to live there. I can just own the property for
Speaker 1: a long period of time. So again, if I can
Speaker 1: set up a place that I'll be happy with, that
Speaker 1: would rent for a positive cash flow, and that I
Speaker 1: could add a lot of value to very quickly to
Speaker 1: sell the profit, that's going to be the best option. Obviously,
Speaker 1: there's trade offs, and you've got like a three pronged
Speaker 1: ven diagram if you will, about all of this to
Speaker 1: get to that sweet spot. But generally speaking, that's how
Speaker 1: we can frame the strategy. And just by zooming out
Speaker 1: and thinking through those three options, I think you can
Speaker 1: make save yourself tens or hundreds of thousands of dollars
Speaker 1: over a ten or twenty year period by thinking through
Speaker 1: those in a really sophisticated way. By the way, that
Speaker 1: short term or that rental can be short term or
Speaker 1: long term um by the way, so there's lots of
Speaker 1: different avenues we can go down. Yeah. I love how
Speaker 1: you break down the exit options in your book. It
Speaker 1: makes it really easy to understand because sometimes we're when
Speaker 1: we buy a house, we're just thinking about living in it.
Speaker 1: We're not thinking about selling it. We're just thinking about
Speaker 1: the mantle and the carpet in the hardwoods. But when
Speaker 1: I saw those exit strategies, I was like, yes, that's
Speaker 1: exactly how you should be thinking when you buy something,
Speaker 1: and it was so helpful. I to appreciate this conversation.
Speaker 1: And I'll be honest, I got this question a lot
Speaker 1: when I first When my husband and I first purchased
Speaker 1: our home, so many people were asking us, so, what
Speaker 1: are you gonna do with it? And what's next? And
Speaker 1: how long will you live there? And I'm just like,
Speaker 1: I literally just signed the documents and you want to
Speaker 1: talk to me about when am I going to move
Speaker 1: out and where am I moving to next. I don't
Speaker 1: have kids, but I imagine it would feel similar to
Speaker 1: that I just gave birth to a baby and people ask,
Speaker 1: what are you gonna have your second? I didn't make
Speaker 1: any kind of sense to me, but I appreciate the
Speaker 1: way that you're framing this, Scott, that this is something
Speaker 1: we need to be thinking about when we purchase of
Speaker 1: What is the long term plan? Doesn't mean that we
Speaker 1: have to rush ourselves out of it, but is this
Speaker 1: going to set me up well to be able to
Speaker 1: make money off of this have a return on that investment?
Speaker 1: Is a good decision in that regard as well as
Speaker 1: for the short term. Yeah, I think there's a lot
Speaker 1: of people who buy a house and just think to themselves, Oh,
Speaker 1: when I'm done with it, I'll just rent it out. Well,
Speaker 1: not every property will rent out for even what you're
Speaker 1: paying for it, let alone making a profit or you know,
Speaker 1: accounting for these uh, all the numbers that you run
Speaker 1: when you run a property to see if it's a
Speaker 1: good rental vacancy. You have to plan that you're going
Speaker 1: to have some vacancy sometimes and capex or capital expenditures.
Speaker 1: You have to plan for replacing the roof. Even if
Speaker 1: it's got a brand new roof, in ten to twenty years,
Speaker 1: you're going to need a new one, and that's fifteen
Speaker 1: or twenty dollars. If you have a giant pile of
Speaker 1: Scrooge McDuck cash, then that's great. But if you don't,
Speaker 1: then you need to start saving for that every month.
Speaker 1: So when you get the bill for fifteen thou dollars,
Speaker 1: it's not a shock. And the same with your furnace,
Speaker 1: your air conditioning unit, your water heater, your kitchen appliances,
Speaker 1: updating the house in general. There's a lot of things
Speaker 1: you have to think about, but you also have to
Speaker 1: think about those as a homeowner. You still have to
Speaker 1: replace your roof as the homeowner at some point in time,
Speaker 1: make sure you have the money for that. Make sure
Speaker 1: that you're not paying every dime of your paycheck goes
Speaker 1: to your housing and then you have no money to
Speaker 1: save for the roof, the air conditioner, the furnace, all
Speaker 1: of which break at the most inopportune times. The air
Speaker 1: conditioner only goes out on the hottest day of the year.
Speaker 1: The furnace only goes out on the hold this day
Speaker 1: in the last decade. UM ask me how I know.
Speaker 1: I had a party at my house was and my
Speaker 1: air conditioner went out, and I'm like, it's degrees and
Speaker 1: there's twenty people at my house and it's so hot
Speaker 1: in here. I'm so embarrassed. That is awful. That's every
Speaker 1: party in Florida. I don't feel bade. I have like
Speaker 1: a personal question which I think people will find helpful.
Speaker 1: So we are hoping to rent out our home when
Speaker 1: we eventually move, But like, one of my big concerns
Speaker 1: is saving for the next down payment. What is like
Speaker 1: a reasonable down payment that I should be trying to
Speaker 1: save for the next house I live in. Do you
Speaker 1: qualify for the v A loan? No, okay um. There
Speaker 1: is a lesser known plan called the U s D
Speaker 1: A loan. It is a geographic specific loan. It's basically
Speaker 1: rural loans, but the maps don't get updated super frequently,
Speaker 1: so the plot of land that's currently a farmhouse and
Speaker 1: a bunch of just farmland right now, in ten years
Speaker 1: might get all built up, but the U s d
Speaker 1: A map hasn't been updated yet, so it's still qualifies
Speaker 1: for the U s D A loan, which is a
Speaker 1: zero percent down payment loan. The f H A loan
Speaker 1: can have three five as little as three percent down,
Speaker 1: and this is all of course, assuming that you have
Speaker 1: good credit. UM. The conventional loan I think is as
Speaker 1: low as three percent or five percent down. If you
Speaker 1: put down, then you don't pay p m I. But
Speaker 1: in some cases playing p m I is a better
Speaker 1: choice than waiting five more years to save up to
Speaker 1: because then you can you know you're then you're getting
Speaker 1: into a home and making the payments UM. In some
Speaker 1: cases p M I is really really expensive. If this
Speaker 1: this is usually in the case of you don't have
Speaker 1: a lot of credit history, you don't have a good
Speaker 1: credit score, you don't have like your self employed there's
Speaker 1: a lot of things that make it difficult for you
Speaker 1: to get a lower p m I payment, But in
Speaker 1: some cases p m I is almost nothing. So I
Speaker 1: would say, uh, if you're not looking in a rural
Speaker 1: or formerly rural area, then three and a half to
Speaker 1: five percent is the minimum what you'll need to get
Speaker 1: into a loan. Okay. So similarly to when like we
Speaker 1: purchased our first house anywhere, there wouldn't be like a
Speaker 1: big difference. Yeah, I would say, like, like, what what
Speaker 1: down payment should you have? I mean, it's gonna be
Speaker 1: a function of what is realistic for you to humulate, right,
Speaker 1: Like when I bought my first place, it was a
Speaker 1: two dollar duplex and I'm making fifty grand a year,
Speaker 1: So to put down or sixty dollars is out of
Speaker 1: the question. It's just simply not an option. So what
Speaker 1: from there? What is a responsible position? Like, in an
Speaker 1: ideal world, you might want to put down, but no,
Speaker 1: I think I think a responsible position to buy a
Speaker 1: home is to put down the down payment, whether that's
Speaker 1: three and a half percent or five percent, then have
Speaker 1: money set aside for closing costs if there are any
Speaker 1: expected repairs you expect to make, right after purchase closing
Speaker 1: on the property, to have those in place, maybe that's
Speaker 1: five thousand, and then to have end to fifteen dollars
Speaker 1: on top of that, um more if you're buying a
Speaker 1: much more expensive property on a coastal city like in California.
Speaker 1: Um but but to cover emergency reserves and expenses, so
Speaker 1: that I think is a really responsible position to buy
Speaker 1: it from, buy a property from, even if that down
Speaker 1: payment amount is zero. I'm hearing from both of you
Speaker 1: so many pieces already, and I know we've not even
Speaker 1: gotten through all of the questions that we hope to
Speaker 1: ask you both, but just some of the logical things
Speaker 1: that should be considered and thought through. And Mindy, you
Speaker 1: said something at the top of the episode that I've
Speaker 1: kind of latched onto of making a calm decision. I'm
Speaker 1: curious if you have more to say about that, because
Speaker 1: we're we are talking about a lot of money, we
Speaker 1: are talking about first time home buying, considering a lot
Speaker 1: of pieces. Any tips for people on how to engage
Speaker 1: in this in a logical manner and be able to
Speaker 1: kind of move through it calmly. I like what you
Speaker 1: just said, logic, this is not the time to be
Speaker 1: emotional because when you do walk into a house and
Speaker 1: you fall in love with it, it's perfect. That's not
Speaker 1: the only house that's going to be perfect for you.
Speaker 1: And when you get so caught up and I have
Speaker 1: to have this, there's fear of missing out. There's like,
Speaker 1: right now, the markets super hot. You get caught up
Speaker 1: in a bidding war, you end up over paying or
Speaker 1: over offering for a property just to win. Like, there's
Speaker 1: this competitive thing that I think a lot of buyers
Speaker 1: are having right now, especially if you've made a couple
Speaker 1: of offers and lost them. Now you're really tempted to
Speaker 1: go big. There's another house for you. Don't get so
Speaker 1: emotionally invested in the property. Yeah, that carpets really beautiful.
Speaker 1: Those hardwoods are gorgeous. I was showing houses this weekend.
Speaker 1: I walked in and this house had Akasha flooring. Oh
Speaker 1: my god, that's the most beautiful floor on the planet.
Speaker 1: And it just looked amazing in the house. But the
Speaker 1: layout was super weird. And as we're walking through the house,
Speaker 1: I said to my partner, where is the dining room.
Speaker 1: You can put the dining room table over here, but
Speaker 1: then you have no living room in this whole house.
Speaker 1: This is so weird. I could have very easily fallen
Speaker 1: in love with those floors. I could have let my
Speaker 1: clients fall in love with those floors. But the layout
Speaker 1: is still weird. And you can always put in those
Speaker 1: Akasha floors into a house that has good layout. So
Speaker 1: this goes back to the whole you know, make a
Speaker 1: calm decision, make a do your research first, go into
Speaker 1: all the open houses and fall in love with every
Speaker 1: single one of them while you're still figuring out how
Speaker 1: much you want to spend, what you need, what you want,
Speaker 1: what's an absolute deal breaker, and what's a just nice
Speaker 1: to have? And don't don't fall in love with the house.
Speaker 1: And I can't. I have said this like nine times
Speaker 1: in the last minute, but like, I can't overstress that
Speaker 1: there is another house. I don't know what the statistics are.
Speaker 1: What are they like fifty million houses in America or
Speaker 1: something like that, Scott, I'm just making that up. But
Speaker 1: there's three hundred million Americans, So let's million units of
Speaker 1: housing stock across the country. Not that I know that
Speaker 1: off the top of my head. From various million of
Speaker 1: rich our rented residences eighty million or owner occupied Okay,
Speaker 1: that is my nerd co host. Welcome to the Frigal
Speaker 1: Stats Podcast. So there's in a hundred and fifty what
Speaker 1: do you say, five million units of property. You can't
Speaker 1: find more than one that you like? I mean that
Speaker 1: right there is you know you can't argue with numbers.
Speaker 1: That right, there's a really great number. Scott. Thank you
Speaker 1: for doing that research so quickly, having its stored away
Speaker 1: and your guard catalog of your mind. Yeah. I think
Speaker 1: it's unrealistic to think we're going to take all emotion
Speaker 1: out of it, especially if it's the first home and
Speaker 1: you're investing a ton of money that you worked really
Speaker 1: hard to save up. But having this reminder in the
Speaker 1: back of our heads of if this doesn't work out,
Speaker 1: there are other options, kind of holding it with an
Speaker 1: in hand until it finally happens, knowing that it's possible
Speaker 1: to get really wrapped up in a home and taking
Speaker 1: steps to protect ourselves in that way to make an informed,
Speaker 1: logical decision. Yeah. Yeah, and informed, that's a really great
Speaker 1: way to phrase it. And you need to make it
Speaker 1: informed decision. Just because you walk into a house that's listed,
Speaker 1: it doesn't mean that that's worth three You can list
Speaker 1: your house at anything, like I could list your house
Speaker 1: for you today for fourteen million dollars. Is it worth it?
Speaker 1: I don't know because I've never been inside it, but
Speaker 1: I'm guessing not. In case to the roof, Mandy, Yeah, yeah,
Speaker 1: you know, you get it. But you can list a
Speaker 1: house at anything, it doesn't make it worth that much money.
Speaker 1: So when you walk in and you fall in love
Speaker 1: with it and it's three five but it really should
Speaker 1: be to seventy five, you get all excited about it.
Speaker 1: Oh this is great. No, make it informed decision that
Speaker 1: that goes with, you know, go onto Zillo and Redfin
Speaker 1: and truly and have your real estate agents send you
Speaker 1: listings and look at everything. Click through all the pictures. Hu,
Speaker 1: that's listened to three. Interesting. Then you go to the
Speaker 1: next one. Oh, that one's also listened at three, but
Speaker 1: it is way better. This one is definitely something I
Speaker 1: would want to see versus that one. This is a
Speaker 1: better value. Uh. You know, just know what what the
Speaker 1: market is and be prepared to act quickly when what
Speaker 1: you want comes up at a decent price. But the
Speaker 1: only way that you can be prepared to act quickly
Speaker 1: is when you're doing your research. In advance instead of
Speaker 1: deciding today that you're gonna buy in siding into contract tomorrow.
Speaker 1: That's super wise. I love that. So is there anything
Speaker 1: else you should do before you download the Zillo app
Speaker 1: and glue yourself to it indefinitely? Yeah, well, well, I
Speaker 1: think I think it calms down to, like, like I
Speaker 1: boiled down mind, and I boil the approach down in
Speaker 1: like three general Rold buckets. Right, one is the strategy
Speaker 1: which we've just went over of understand your exit options.
Speaker 1: Understand this is probably not going to be your forever home.
Speaker 1: If if it isn forever home, then you know, and
Speaker 1: you can make decisions accordingly, and you you don't have
Speaker 1: to consider the rent or the the improving the value
Speaker 1: as as strongly if you're truly sure, but just make
Speaker 1: sure you're not ever waiting that do the rent first
Speaker 1: buy analysis. And that's the several hundred thousand dollar decision.
Speaker 1: The second decision is am I getting a good deal,
Speaker 1: like am I buying at the right value and removing
Speaker 1: that emotion from the process, which and then the third is,
Speaker 1: you know, am I getting the cellular to replace the
Speaker 1: water heater for you know, out of that and that
Speaker 1: and and so if you go down these three buckets,
Speaker 1: you know, the one is several hundred thousand dollars of
Speaker 1: in terms of its decision making relevance, the second is
Speaker 1: fifty thousand dollars getting a good deal versus a bad deal,
Speaker 1: and the third one is two to ten thousand dollars.
Speaker 1: And everyone overweights these and kind of I think the
Speaker 1: reverse order. But moving down into the getting a good
Speaker 1: deal phase, um kind of you know, mindy hit all
Speaker 1: of those things. But you know, if you want to
Speaker 1: boil it down to a practical approach, like what can
Speaker 1: I actually do to act on this information? First? Don't?
Speaker 1: You can pull up Zilo or any other listing portal
Speaker 1: or redfin or ask your agent to to pull that up.
Speaker 1: But you look at the sold listings in the last
Speaker 1: nine days. You don't look at the active listings. When
Speaker 1: you look at the active listings, you're usually looking at
Speaker 1: one of three types of properties. One the properties that
Speaker 1: have just come to the market today and are gonna
Speaker 1: be gone tomorrow because they're good deals. The second is
Speaker 1: the properties that are way overpriced, and the third is
Speaker 1: the properties that have something horribly horribly wrong with them
Speaker 1: that's why they're sitting on the market for more than
Speaker 1: a few weeks in today's market. So if what happens
Speaker 1: is you get terrified by looking at the active listings,
Speaker 1: so don't look at them. Look at the stuff that's
Speaker 1: actually sold. That is what is trans transacting in your market.
Speaker 1: And you say, great, I'm gonna get with my my,
Speaker 1: my spouse or partner, or if I'm buying them as
Speaker 1: a as a single individual, I'm gonna but look, just
Speaker 1: make a set of criteria, two paragraphs on a piece
Speaker 1: of paper. I want a three bed to bath, two
Speaker 1: thousands square foot home with a yard for the dog,
Speaker 1: two car garage in this part of the neighborhood. I'm
Speaker 1: going to pay a little bit more for this edge
Speaker 1: of the neighborhood. I'm gonna pay a little less for
Speaker 1: that edge of the neighborhood. I don't want that neighborhood.
Speaker 1: Here are three areas that you know, stuff like that.
Speaker 1: If you can boil it down to two paragraphs, you're
Speaker 1: probably in pretty good shape. And then you look at
Speaker 1: the active list or the sold listings, and you see
Speaker 1: what is actually transacted that meet my criteria. That is
Speaker 1: your price range. That gets you out of fantasy land.
Speaker 1: Real quick um, and it only takes like a few
Speaker 1: hours to compile this buying your first home, by the way,
Speaker 1: is it's not two hours of effort, but it's hours
Speaker 1: of effort I think to do it right given the
Speaker 1: magnitude the decision. So this is a few hours you
Speaker 1: spend looking for what I want? What does that exists?
Speaker 1: Is it actually selling? And then what you'll find typically
Speaker 1: is like, hey, I'm gonna put all this down, so
Speaker 1: I'll get to like ten properties in the last hundred
Speaker 1: eighty days or five in the last ninety days that
Speaker 1: have sold met my criteria. That means one property is
Speaker 1: coming on the market every eighteen days. That means that
Speaker 1: on average and so so time is gonna be longer
Speaker 1: or shorter gaps there. So the next thing you have
Speaker 1: to do is get yourself out of this artificial time
Speaker 1: constraint that most home buyers have, or many home home
Speaker 1: buyers have when they're buying a home. My lease is
Speaker 1: expiring on June. Therefore I must buy a property by
Speaker 1: the by the end of May, otherwise my lease will
Speaker 1: you know, I I'll be stuck. You know, no, go
Speaker 1: month to month with your landlord, pay the extra hundred
Speaker 1: and fifty or two hundred bucks a month, so you
Speaker 1: can make a four hundred thousand dollar decision and a
Speaker 1: really um you know, back going fishing and waiting for
Speaker 1: that property that's going to hit every two and a
Speaker 1: half weeks to come on the market, rather than chasing
Speaker 1: the one you have to buy at the end of
Speaker 1: your artificial time constraint. Go live in a short term
Speaker 1: rental for a little bit while you make this decision.
Speaker 1: This is a this is uh tens of thousands or
Speaker 1: maybe hundreds of thousands of dollars stake decision. Don't rush
Speaker 1: it by an artificial timeline. And then you set up
Speaker 1: your You just get your ducks and row, make sure
Speaker 1: you're pre approved with your lender. Make sure your agent
Speaker 1: is sending you. This is a very easy task for you,
Speaker 1: for any agent to do that. You just ask them
Speaker 1: to send you an auto email whenever a property that
Speaker 1: meets your criteria comes on the market, and then boom,
Speaker 1: one of these days, that property is gonna come on
Speaker 1: the market, and you're gonna be it's gonna come on
Speaker 1: the market at to thirty in the afternoon on Thursday,
Speaker 1: and you're not leaving work earlier, but you're canceling your
Speaker 1: evening plans, going to tour it, and submitting an offer,
Speaker 1: and you're gonna lose two, three, four of these things
Speaker 1: over a few months, but finally you're gonna hit your
Speaker 1: winner on average within a three or six month timeline.
Speaker 1: And that's that's kind of a I'm rushing through this,
Speaker 1: but that would be a framework for potentially making a
Speaker 1: making that cold blooded, um ruthless decision that that removes
Speaker 1: emotion from the home buying process and allows you to
Speaker 1: compete in this kind of like heavy seller's market. So
Speaker 1: many knowledge bombs, Like my my heart just keeps like
Speaker 1: racing faster, and it's like it takes I think that's everything.
Speaker 1: Like if you get nothing else out of the episode,
Speaker 1: which I know you will, but like that little monologue
Speaker 1: right there is going to be so valuable because like, hey,
Speaker 1: it takes out the arbitrary budget that so many homeowners have.
Speaker 1: It's like this is you know, my budget is whatever
Speaker 1: I get approved for. No, like this is a way
Speaker 1: to set a realistic budget to get everything you want,
Speaker 1: but then also like get it at the price that's right.
Speaker 1: It's just so much like thank you, I like what
Speaker 1: you just said I love going on rants like that,
Speaker 1: so anytime, I'm glad you liked it. I love what
Speaker 1: you just said. Oh my budget is whatever I'm approved for. No,
Speaker 1: it isn't. Your budget is whatever you want to make
Speaker 1: your payment act. So you call up your lender and
Speaker 1: you say how much am I approved for? And he
Speaker 1: says five thousand dollars and then you run that through
Speaker 1: the mortgage calculator and you're like, that's going to be
Speaker 1: a a month payment. I only want to make an
Speaker 1: eighteen hundred dollar a month payment, then don't borrow five
Speaker 1: hundred thousand dollars. And I'm making these number is up.
Speaker 1: I don't know what FIVED is, and rates change all
Speaker 1: the time anyway, But the if you only want to
Speaker 1: make an eighteen hundred dollar a month payment, don't look
Speaker 1: for houses that will give you more than an eighteen
Speaker 1: hundred a month payment. And that's principal, interest, taxes, insurance,
Speaker 1: all those things combine to make your payment. It's not
Speaker 1: just principal and interest. Make sure you account for everything
Speaker 1: because it'll all be due anyway. I also want to
Speaker 1: highlight the arbitrary timeline piece. I think that's another big
Speaker 1: one for people of when I need to be in
Speaker 1: a home by and certainly there can be an ideal timeline,
Speaker 1: but figuring it out to be able to get the
Speaker 1: best possible home and the best possible price range, to
Speaker 1: be able to make yourself some flexibility, Uh, even if
Speaker 1: you are about to give birth or about to be
Speaker 1: kicked out of your current living situation, getting creative about
Speaker 1: what you can do in the meantime if you haven't
Speaker 1: found the home, and not be pushed or rushed into
Speaker 1: something that is not right for your budget, not right
Speaker 1: for your family. Thanks for highlighting that, Scott, Yeah, I
Speaker 1: think I think that's just a huge component of this
Speaker 1: that again is a sacred cow in the homebuying process
Speaker 1: that needs to be slaughtered. And I think that the
Speaker 1: the you're guaranteeing your agents income. Um, if you're buying
Speaker 1: on that kind of timeline, Um, you're you're putting yourself
Speaker 1: susceptible to Hey, that one property that came on the
Speaker 1: market today, that's the one that even though it's a
Speaker 1: bad it's a it's a slightly bad deal maybe, but
Speaker 1: it's better than what's currently what else is currently on
Speaker 1: the market. That's how you fall into the traps um
Speaker 1: if you have that artificial timeline. Yeah, And we say
Speaker 1: that in frugality, like if you if you plan, you
Speaker 1: save money. If you don't plan, you will pay for it.
Speaker 1: You will pay for that emergency and that convenience. The
Speaker 1: best way to save money is to plan and be patient.
Speaker 1: And then I also love, like, what's an extra hundred
Speaker 1: hundred fifty dollars a month if you're going month to
Speaker 1: month in your least, if it's going to save you
Speaker 1: like tens of thousands of dollars later on in this
Speaker 1: home buying decision purchase. In reality, we tend to nickel
Speaker 1: and dime ourselves to death without realizing the bigger things
Speaker 1: at stake. And so I think that's another like mindset
Speaker 1: to get over to save like more significant amounts of money.
Speaker 1: Speaking of real estate agents, and then we talked about
Speaker 1: that a little bit already. I know we've recently heard
Speaker 1: that there's more real estate agents out there than homes
Speaker 1: for sale, which I can speak to, even at least anecdotally.
Speaker 1: I feel like every other person I'm meaning is a
Speaker 1: real estate agent. What are some of the secrets you
Speaker 1: guys have or even tips for choosing a good real
Speaker 1: estate agent? When there are so many trying to give
Speaker 1: you their business cards. Step one, pick up your phone
Speaker 1: and call them. If they don't answer, and if they
Speaker 1: don't call you back that same day at the latest,
Speaker 1: don't do business with them. They don't have any interest
Speaker 1: in courting your business. How much interest are they going
Speaker 1: to have keeping you once you are a client? UM?
Speaker 1: I tell agents all the time. Your number one, my
Speaker 1: number one tip for being a good agent, answer your phone.
Speaker 1: When people call you, answer your phone. And obviously, if
Speaker 1: you're at the client, you know, wait until you're driving
Speaker 1: to the next property and then call them back. But
Speaker 1: don't sit there and oh, I'll call them back next week.
Speaker 1: I'll call them back, you know, another time they've already
Speaker 1: moved on. And if your agent isn't answering the phone
Speaker 1: right away and isn't responding to in a timely manner,
Speaker 1: you should move on and you should interview multiple agents.
Speaker 1: While you can have success driving by a sign in
Speaker 1: somebody's yard and calling up that agent to represent you,
Speaker 1: you're probably not going to find the best agent for
Speaker 1: you driving by a sign. So call up that person,
Speaker 1: especially if you see their name all over the city
Speaker 1: that you're looking in. But also ask your friends, ask
Speaker 1: your coworkers, ask, um, you know, who did you use?
Speaker 1: Did you like them? Did you not like them? Just
Speaker 1: as easily or just as important as to find somebody
Speaker 1: that you like is to like. Don't even bother interviewing
Speaker 1: somebody that your your friends said. Oh yeah, we used
Speaker 1: Bob and he was horrible. He never called us back,
Speaker 1: we almost missed a deadline, like blah blah blah. Don't
Speaker 1: interview Bob. He's not a good agent. He's not an agent.
Speaker 1: He's not an agent for you. But when you're asking
Speaker 1: the agent, when you're interviewing the agent, asked them what
Speaker 1: is their preferred method of communication. I personally like email
Speaker 1: and text because it's then it's in writing. Other people
Speaker 1: like to talk on the phone. Great, if you want
Speaker 1: to talk on the phone, we can talk on the phone.
Speaker 1: But I prefer email and text because then I can
Speaker 1: go back and review what I said, you know, and
Speaker 1: make sure that I'm not misremembering something. Ask them how
Speaker 1: much experience they have. If you have a brand new agent,
Speaker 1: is that the best choice for you when you're a
Speaker 1: first time HomeBuyer. It could be because maybe they just
Speaker 1: recently got licensed, but they've been in the business forever
Speaker 1: because their mom's an agent forever. But it might be
Speaker 1: a better choice to work with somebody who's been in
Speaker 1: the agent in the market for a while and been
Speaker 1: been an agent for a while, because then they know
Speaker 1: more about what to do, Like you're not learning together. Well,
Speaker 1: I just want to shime in and say, yeah, Mindy is, like,
Speaker 1: I think, the real expert on this kind of stuff.
Speaker 1: I just wanted to add that we have like an
Speaker 1: agent interview questionnaire that's like one of the giveaways with
Speaker 1: the book. But if you're listening, um, we could just
Speaker 1: make it available to everyone, if you guys, it's like
Speaker 1: a three page list of the questions that Mindy has
Speaker 1: outlined here that we could just make available for anyone listening. Um,
Speaker 1: if you'd like it. Yeah, that'd be great. Yeah, we
Speaker 1: can include that in the show notes for sure. Yeah.
Speaker 1: Other things to ask them is this your full time job?
Speaker 1: Maybe you want an agent who is a full time agent,
Speaker 1: or maybe your full time agent is so busy they
Speaker 1: won't have time to talk to you all the time,
Speaker 1: and maybe a part time agent would be better for you.
Speaker 1: There's no right answer. It's really a feeling. Do you
Speaker 1: do you feel like they respect you or do you
Speaker 1: feel like they're talking down to you all the time.
Speaker 1: There are agents. Hopefully your agent knows more than you
Speaker 1: do when you're buying a house for the first time,
Speaker 1: but that doesn't mean that they should, you know, make
Speaker 1: you feel stupid for even asking a question. You should
Speaker 1: absolutely feel comfortable asking every single question because if you've
Speaker 1: never done it before, you should absolutely ask all the questions.
Speaker 1: And who cares at the agent thinks you're an idiot
Speaker 1: for asking the question, get the answers that you need
Speaker 1: to make an informed decision. It all comes back to
Speaker 1: that informed decision thing. So good, such good opportunities to
Speaker 1: practice self advocacy. Yeah, who cares if it's a dumb question.
Speaker 1: You're like making one of the biggest decisions of your life.
Speaker 1: You better understand what you're doing. So yeah, someone who's
Speaker 1: going to answer those questions not be condescending I want agree. Yeah,
Speaker 1: and ultimately like they need you for their paycheck, like
Speaker 1: because that's how they get paid, So ask the questions. Yeah.
Speaker 1: I want to just add in on that that you know,
Speaker 1: the thing to understand about how agents should be representing
Speaker 1: your best interests and and they do. But they're in.
Speaker 1: They should they should be if they're good. But there um,
Speaker 1: their incentives are they get paid the bigger house you buy,
Speaker 1: because usually the commission is tied to a percentage of
Speaker 1: the home's value, and they get paid sooner the faster
Speaker 1: you transact. So when you hear what a top agent is,
Speaker 1: any brokerage is top agent is their best selling agent,
Speaker 1: the one who does the most volume, not the one
Speaker 1: who produces the best outcomes for clients necessarily, Um, it's
Speaker 1: the one who processes the most commissions checks the fastest,
Speaker 1: the biggest commission checks the fastest, right, and and the
Speaker 1: most of them, right and so and so that's what
Speaker 1: a top agent means in your local area, which is
Speaker 1: not necessarily what you want to represent your interests. So
Speaker 1: that can that they can certainly be a top agent
Speaker 1: and represent your your best interests, but just understand that
Speaker 1: nuance and how they get paid. They're looking for someone
Speaker 1: who will transact quickly on the largest home, but the
Speaker 1: limits of their purchasing power. Typically that's the best in
Speaker 1: a condensed timeline because they know you have to buy
Speaker 1: because your least expires on June. Right. That makes the
Speaker 1: agent very very happy and guarantees income for them. I
Speaker 1: don't think that's necessarily what you want, um, And you
Speaker 1: need to understand that's how the incentives are structured and
Speaker 1: be able to get yourself into relationship with the expectations
Speaker 1: that are gonna be on your timeline buying what you
Speaker 1: want over those time periods. And there's plenty of agents.
Speaker 1: There are more agents than listings out there who will
Speaker 1: be more than happy to take you up on on
Speaker 1: your timeline and what you want out there. Um. It
Speaker 1: is a buyer's market for real estate agents right now.
Speaker 1: That's so good to know because we look at the
Speaker 1: big you know, the big people I guess on advertisements
Speaker 1: and and stuff and say, oh, they're they're the best,
Speaker 1: they're selling the most, but they're probably just selling the
Speaker 1: biggest houses. There's on the biggest houses at the fastest pace.
Speaker 1: We're buying the most advertising. Yeah, yeah, Okay, So we're
Speaker 1: at the point where we've done the research, we've got
Speaker 1: the agent, we've got preproval from lender, all this stuff,
Speaker 1: and we are we found a house. So, like, what
Speaker 1: are some things about the actual home buying process that
Speaker 1: maybe first time home buyers aren't aware of? That you
Speaker 1: think that they should be the actual process. I think
Speaker 1: a lot of people don't realize that it isn't just
Speaker 1: oh I bought, I put an offer in for three
Speaker 1: thou therefore I need to get a loan for three
Speaker 1: and that's the end. And you have closing costs, which
Speaker 1: we've mentioned before two to four percent of the purchase price,
Speaker 1: depending on you know, the purchase price and what city
Speaker 1: you're in, and you know, there's a variety of things
Speaker 1: that go into that, but a good ballpark is two
Speaker 1: to four percent. So on a hundred thousand dollars, that's
Speaker 1: two to four thousand dollars. On three hundred thousand dollars,
Speaker 1: now you're at six to twelve thousand dollars. That's a
Speaker 1: lot of money. Do you have that much money and
Speaker 1: that's not your down payment, that's your closing costs. Then
Speaker 1: you've got down payment on top of that. So it
Speaker 1: is I don't want to say it's expensive to buy
Speaker 1: a home, but it definitely costs money to buy a house,
Speaker 1: so be prepared for that. You need to have a
Speaker 1: home inspection, and you need a good home inspector to
Speaker 1: walk through the house and tell you the state of
Speaker 1: the house, not gloss over things so that the deal
Speaker 1: goes through. I have a really great home inspector. Shout
Speaker 1: out to Rick. He comes through and he's actually, he
Speaker 1: could be pretty abrasive. Uh look at this right here,
Speaker 1: this is this is horrible. I don't know why they
Speaker 1: wouldn't have taken care of this. You know, he's but
Speaker 1: he's telling me, he's like my dad walking through the
Speaker 1: house and pointing out all the things that aren't great.
Speaker 1: Now am I going to ask for repairs from the seller? Maybe?
Speaker 1: Maybe not in this market right now, you know, in
Speaker 1: March April, May of two one, it's really not. You
Speaker 1: could ask for all you want, but the seller is
Speaker 1: going to be like, no, I've got fifty seven other offers.
Speaker 1: I'm not going to give you any repair at all.
Speaker 1: So do you want thouse or not? But I still
Speaker 1: need to know about it. I need to know that
Speaker 1: the furnace is twenty five years old. I don't know
Speaker 1: that by looking at it. And I'm in a lot
Speaker 1: of houses, I can look at the furnace and it's
Speaker 1: all shiny pretty. I'm like, oh, that's new. And then
Speaker 1: Rick comes in He's like, this vertus was manufactured in Oh,
Speaker 1: that's a little bit older than new, so you know,
Speaker 1: you can make things look really pretty and they're actually
Speaker 1: really outdated. You can cover up a lot, and then
Speaker 1: your inspector comes in and he's like, oh, do you
Speaker 1: see how it's like tilting to hear that's gonna be
Speaker 1: an eight dollar repair. Great, I want to know that.
Speaker 1: So having a good home inspector is really, really, really valuable.
Speaker 1: I had a home inspector come through and on one
Speaker 1: property and tell me that there might be fake stucco
Speaker 1: or on the front of the property. I go and
Speaker 1: do some research that has been shown to cause mold,
Speaker 1: and if it's not installed correctly and mold in such
Speaker 1: a way that the whole house may have to be
Speaker 1: torn down because it's so infested it can't be fixed.
Speaker 1: Kind of like, that's a huge thing. I want to
Speaker 1: know that, and I don't want to buy that house.
Speaker 1: So there's a lot of people who will buy a house.
Speaker 1: You know, as is does not mean you can't have
Speaker 1: a home in spe action. As is means the seller
Speaker 1: might not be willing to fix anything or give a
Speaker 1: price reduction. But if you walk in and you discover
Speaker 1: that it used to be a meth lab, maybe that's
Speaker 1: not something you want to live in, you know. So
Speaker 1: you absolutely need a home inspection, you need an appraisal,
Speaker 1: and you can't choose your appraiser, and that's kind of
Speaker 1: a whatever, that's just how it goes. That's that's the
Speaker 1: price you're gonna pay, and you can't choose them, and
Speaker 1: they come back with I could go on a rant
Speaker 1: um I'm not going to, but some appraisers right now
Speaker 1: the market is what happens if your appraisal it comes
Speaker 1: into low, Like, what's the what's the outcome there? Well, oh,
Speaker 1: so that is an interesting scenario. So right now the
Speaker 1: market is hot, hot, hot, hot hot, and prices are
Speaker 1: just hopping over past sales and the appraiser can come in.
Speaker 1: Some appraisers, i know, like don't want the market to
Speaker 1: go up so fast, so they're they're looking at recently
Speaker 1: sold houses that you know, maybe aren't maybe they're picking
Speaker 1: the lower ones. And I'm not trying to throw appraisers
Speaker 1: under the bus. The markets insane. But if your appraisal
Speaker 1: comes in low, you have three options. You can bring
Speaker 1: cash to closing, which is what the seller would love.
Speaker 1: You can ask the seller to reduce the price to
Speaker 1: the appraisal, which the seller will hate. You can cancel
Speaker 1: the contract, and I mean you can split the difference
Speaker 1: to you, but that's one of the others. But yeah,
Speaker 1: the appraisal. Your lender will only lend on the appraisal amount.
Speaker 1: So you offered three fifty on this house. It only
Speaker 1: appraised at three twenty five. Your loan is three twenty
Speaker 1: five minus your closing costs and down payments and all
Speaker 1: of that, I'm sorry, minus your down payment. So now
Speaker 1: you've got a difference between three twenty five and three fifty.
Speaker 1: Do you have to in cash just sitting there waiting
Speaker 1: to be thrown at a house? Maybe? Maybe not, But
Speaker 1: is that your smartest decision right now? Because you're essentially
Speaker 1: paying more than the house is worth. And there's this
Speaker 1: line that, oh, a house is worth anything whatever people
Speaker 1: will pay for it. But yes and no, if everybody
Speaker 1: is paying three twenty five and you I'm gonna pay
Speaker 1: three fifty, it's still only worth three. I remember that
Speaker 1: being a nail biting moment for our purchase of our home,
Speaker 1: was this is kind of the final piece of the
Speaker 1: puzzle will it be appraising? I remember thinking why does
Speaker 1: this happen last? Why why don't the appraisals happen? And
Speaker 1: then the next things it's like all these hoops have
Speaker 1: been jumped through, and now maybe or maybe not, the
Speaker 1: appraiser is going to think it's worth what you think
Speaker 1: it's worth. Anyhow, for us, it went through. But yes,
Speaker 1: that's that was that was an unexpected part of the
Speaker 1: process for my first time home buying experience. So I'm
Speaker 1: glad that you mentioned it and are making people aware
Speaker 1: of that factor. It's very real factor. Yeah, I I
Speaker 1: just been him in that. There's a whole bunch of
Speaker 1: things inside of this closing process. Once you offer on
Speaker 1: the property, there's an earnest money deadline. There's an inspection
Speaker 1: deadline where you have to complete your inspection by There's
Speaker 1: an inspection objection deadline where you review the results of
Speaker 1: the inspection and decide if you're gonna beat the seller
Speaker 1: up and ask them to pay for the roof replacement
Speaker 1: or the furnace replacement or not um and that's an
Speaker 1: art right. Then there's the appraisal deadline, there's the loan funding,
Speaker 1: and so there's a timetable on this. The good news
Speaker 1: is that all of those questions I think can be
Speaker 1: answered what one you can just like read up on
Speaker 1: what that process looks like. Um, so that's where all
Speaker 1: shamelessly promote our third part of our book. You can
Speaker 1: just so you can get some of those those ideas.
Speaker 1: But really, if you just have a good agent, I mean,
Speaker 1: I told you like, these are their top agents out there,
Speaker 1: These are people. One thing that is good about a
Speaker 1: top agent is their masters of coordinating that schedule so
Speaker 1: there's no disruptions to the commission check which which is
Speaker 1: paid out at the closing timeline. Right. So agents are
Speaker 1: heavily incentivized to make sure that these things go smoothly.
Speaker 1: They should in most cases, I think be able to
Speaker 1: provide you with an inspector with loan referrals with if
Speaker 1: if in Colorado, the inspector says, hey, you really should
Speaker 1: do a sewer scoping and a radar test. And that
Speaker 1: could be completely different depending on where you are. It
Speaker 1: might be termites in one part of the country, or
Speaker 1: it might be like those old oil uh furnaces in
Speaker 1: the Northeast that they've got for for the or whatever
Speaker 1: it is to heat to heat their properties up there. Right, So,
Speaker 1: your your agent should be able to handle most of
Speaker 1: this stuff if you've done a good job selecting that.
Speaker 1: But it's your job to just understand that in general,
Speaker 1: there's gonna be a lot of nuanced this closing process.
Speaker 1: It's gonna terrify you. The inspection report. Rick is not
Speaker 1: coming with a pleasant list of things there. He's telling
Speaker 1: you about all the things about your new your four
Speaker 1: hundred thousand dollar asset or eight hundred thousand dollar asset,
Speaker 1: whatever it is you're buying that are wrong with it
Speaker 1: and that need to be replaced, and they don't tell
Speaker 1: you like, oh, this is two thousand or whatever and
Speaker 1: the official report, so you can you know, one of
Speaker 1: Mindy's pro tips is to be there when the inspector
Speaker 1: is going through it so you can ask them with that. Sorry,
Speaker 1: that's one of your tips, um, but but yeah, that
Speaker 1: that's the like. Just know that that's all going on,
Speaker 1: and that at the end of the day, if you've
Speaker 1: made a good choice with your real estate agent, they
Speaker 1: should be able to professionally and pre empt a lot
Speaker 1: out of your questions and walk you through that closing process.
Speaker 1: If you're being surprised by every part of that closing
Speaker 1: process is a sign that you didn't do your homework
Speaker 1: and choosing the right agent. I think, yeah, thank you.
Speaker 1: We don't have to be experts on all of us,
Speaker 1: especially if we've got a good agent. But speaking of
Speaker 1: non terrorizing moments and non nail biting moments, it's a
Speaker 1: moment that I look forward to every week. I feel
Speaker 1: so good about it. The bill of the week. That's right,
Speaker 1: it's time for the best minute of your entire week.
Speaker 1: Maybe a baby was born and his name is William.
Speaker 1: Maybe you've paid off your mortgage, maybe your car died
Speaker 1: and you're happy to not have to pay that bill anymore.
Speaker 1: That build Buffalo bills, Bill Clinton, this is the bill
Speaker 1: of the week, all right, Scott and Mindy. Every week
Speaker 1: we invite our listeners or our guests to share with
Speaker 1: us their favorite bill. And we've actually recently been sharing
Speaker 1: two bills every week because we've had a backlog. So
Speaker 1: it just makes sense that we keep going on. Here.
Speaker 1: We've got two guests, So Mindy, I know you have
Speaker 1: a bill. I would love to hear that one. First.
Speaker 1: I have Bills of the week. What I have in
Speaker 1: my hand is a millionaires scratch pad. If I scroll
Speaker 1: through the bills that are in here, they have a
Speaker 1: date of either or nine. It's too small for me
Speaker 1: to read. But these are ten two dollar bills stuck
Speaker 1: together like a notebook style, and it says on the
Speaker 1: bank of Leah County in New Mexico, and it is
Speaker 1: ten two dollar bills. And apparently millionaires use these to
Speaker 1: write notes on, which is dumb because they're all covered
Speaker 1: in printing. But this is this is actually ten reel
Speaker 1: two dollar bills. So I have twenty dollars in my
Speaker 1: hand in my millionaire scratch pad, and I will send
Speaker 1: pictures to you so you can put them in the
Speaker 1: show notes because this thing is really fun. And I
Speaker 1: was just I've been unpacking boxes because we moved two
Speaker 1: years ago, um and life, and I found like six
Speaker 1: of these, and I'm like torn, Do I use these?
Speaker 1: Because they're two dollar bills? They're fun, but also they're
Speaker 1: laminated and they're like sequential order bills, so it's just
Speaker 1: kind of cool to have, So I probably not spend
Speaker 1: them on this stickam in my box again? Do you
Speaker 1: think it could be a play on the words like
Speaker 1: scratch like money? Like is that a thing? Oh? I
Speaker 1: didn't even think of that. I bet it is. It's
Speaker 1: just but it is such an interesting concept, Like it's
Speaker 1: like a notebook. It looks like a notebook of money,
Speaker 1: but it's real money. It is a notepad of real money.
Speaker 1: The frugal part of me knows that even if I
Speaker 1: was a millionaire, I would not be writing on money.
Speaker 1: I'd be saving it. Last people I think to write
Speaker 1: on money. Yes, that's why the billionaires. That's a great
Speaker 1: approach becoming a millionaire. Start with two million and then
Speaker 1: right on and you'll soon be a millionaire. So wise,
Speaker 1: so wise? What about you, Scott? What do you got
Speaker 1: for us? Mine is much more boring. We just discovered
Speaker 1: recently that um, because my wife works from home, that
Speaker 1: her internet is reimbursable. So my favorite bill recently is
Speaker 1: our internet bill, which will be paid for it by
Speaker 1: her company. So that's great. Yoh, that's awesome. Can they
Speaker 1: backtrack for all the months that they didn't reimburse your
Speaker 1: for internet? Yes, guys, well done. There we go. That's
Speaker 1: that's the real bill. Is all that all that money
Speaker 1: that's coming back in one'll buy a couple of Mindy's notepads. Amazing,
Speaker 1: Thanks so much, Scott, Mindy for sharing your bills of
Speaker 1: the week. If all of you listening on share your
Speaker 1: bill of the week, whether it's money that could be
Speaker 1: written on or an internet bill that got reimbursed, or
Speaker 1: anything else, literally, anything else you know that's true. Visit
Speaker 1: Frugal Friends podcast dot com slash bill, leave us your
Speaker 1: bill now it's time for I didn't see that one
Speaker 1: come in either, did you, guys? I didn't. We get
Speaker 1: towards the end of the episode and I just got
Speaker 1: to start. Okay, hit me guess wild. So our lightning
Speaker 1: round today is where we get real and vulnerable and honest.
Speaker 1: That's Jen's version. She's moving us into authentic vulnerability. And
Speaker 1: I'm a little bit undecided about it. It's it's not
Speaker 1: something that was announced in any of our business meetings.
Speaker 1: I just announced updates live on air. Tell us about
Speaker 1: your deepest, darkest failures go or if you don't want
Speaker 1: to share that you could share. Are your memory of
Speaker 1: your first home? Buying your first home and if you
Speaker 1: have lovely memory or if it was a nightmare and
Speaker 1: why how mindy? Tell us? My first home was a
Speaker 1: condo that I bought because I had taken over a
Speaker 1: friend's lease. Her lease came up and I moved out
Speaker 1: and I said I am not going to be throwing
Speaker 1: money away on rent anymore. So I found a condo
Speaker 1: that I could barely afford. Because I wasn't making very
Speaker 1: much money, I didn't do any sort of research into anything.
Speaker 1: I'm just like, Oh, it's fifty dollars, I'm going to
Speaker 1: buy that. So I did, and I moved in, and
Speaker 1: then the next month they doubled the h o A
Speaker 1: fee because they had to have a special assessment to
Speaker 1: replace all the boilers which were broken, and they had
Speaker 1: no money in the reserve fund because they were terrible
Speaker 1: with money. So for the next four years I had
Speaker 1: to pay a double assessment, which was not in my
Speaker 1: original plans. It was like two hundred dollars a month,
Speaker 1: so I'm paying four d a month, and when you're
Speaker 1: making twenty thousand dollars a year, and extra two a
Speaker 1: month is actually a big chunk of your regular spending.
Speaker 1: So it was a good experience in that I sold
Speaker 1: it after I got married for seventy five thousand dollars,
Speaker 1: and since it was my primary residence for two years,
Speaker 1: I paid no capital gains taxes, so all of that
Speaker 1: extra dollars went right into my pocket. And I said
Speaker 1: to myself and my husband. I'm going to do that again.
Speaker 1: I'm going to take this ugly house and make it
Speaker 1: beautiful and let's see what we can get for it.
Speaker 1: And that started our live in flipping career. So it
Speaker 1: was a good experience in that now I'm a real
Speaker 1: estate investor. If I hadn't bought that first property, I
Speaker 1: might not have bought any more and I wouldn't be
Speaker 1: working at bigger pockets today. It was a bad experience
Speaker 1: because I had to pay two hundred dollars a month
Speaker 1: extra that was not in my budget, and that was
Speaker 1: a bit of a pinch. M hmm. I'm so thrilled
Speaker 1: for this long term, amazing effect of this, but yeah,
Speaker 1: that short term piece, and I think it's just another
Speaker 1: takeaway for all of us to anticipate the unexpected. Definitely
Speaker 1: have more money than you think set aside for some
Speaker 1: of these unanticipated costs. Uh. And but congratulations on making
Speaker 1: more money than what you bought that for significantly. That's
Speaker 1: with that, Yes, what about for you, Scott? Yeah, my
Speaker 1: first property was a duplex in northeast Denver. I bought
Speaker 1: it for two thousand, but twelve thousand dollars down and
Speaker 1: during the process. Um. The property was listened through home Path,
Speaker 1: which meant that it was a duplex only available to
Speaker 1: people who were attempting to live in the duplex. So
Speaker 1: I had very limited competition at the time, and I
Speaker 1: would say it was terrifying. It was almost all I
Speaker 1: was like putting all your chips in the table. Um.
Speaker 1: You know, it was one year of my career, so
Speaker 1: it wasn't that many chips, but it was a lot
Speaker 1: to me. It was lifetime of accumulated wealth to me.
Speaker 1: And um, yeah, the the biggest part of it was
Speaker 1: the inspection report was again terrifying. But I had an
Speaker 1: investor friendly real estate agent and I had an investor
Speaker 1: friend who walked through the property with me, and they
Speaker 1: were both kind of like, yeah, this this is a winner.
Speaker 1: Like you're you don't have any competition with this. There's
Speaker 1: some problems that roof is going to cost you, but
Speaker 1: it's overall still a really good deal, and so I
Speaker 1: ended up buying it. Um. I did have to pay
Speaker 1: shell out a lot to repair the roof a few
Speaker 1: years later, but otherwise it's been a really great investment
Speaker 1: for me. You still have it, yep. I rented it
Speaker 1: out while I lived in it and now it's just
Speaker 1: a straight up rental. Nice. Yeah, that they that they
Speaker 1: required you to live in it. I would imagine that
Speaker 1: that takes away some of the people who are only
Speaker 1: interested in it being an investment property. That's that's neat. Yeah,
Speaker 1: usually those are going to be available through foreclosure, and
Speaker 1: there's fewer foreclosures nowadays because the property values are rising
Speaker 1: so fast. So it's a little bit rarer right now. Well,
Speaker 1: well done, duplex as the dream for sure, Jill. So,
Speaker 1: I am currently in my first home and we've not
Speaker 1: even been here for a year yet. August we moved
Speaker 1: in and you guys, it went as flawlessly as could
Speaker 1: be expected, given the way that the market has shifted
Speaker 1: so much in this past year and how many people
Speaker 1: I'm hearing are getting out bid and so many things.
Speaker 1: We moved from out a state. We moved from outside
Speaker 1: Philly to St. Petersburg, Florida, and it went so so well.
Speaker 1: We had a fantastic real estate agent. It was not
Speaker 1: on the MLS. It was only on Zillo. My husband
Speaker 1: actually found it. The real estate agent hadn't heard of it.
Speaker 1: We just found it and then connected with the real
Speaker 1: estate agent to help us out. And it's right next
Speaker 1: to the water, and it is just a magical dreamland.
Speaker 1: So I'm thrilled with it. Although there were a lot
Speaker 1: more unanticipated costs and fees than I imagined in the
Speaker 1: home buying process. I know that we've already talked about that,
Speaker 1: but for us, I don't. I mean, of course there's
Speaker 1: nuances in every situation. I anticipated closing costs being about
Speaker 1: five or six thousand dollars. I thought that I was
Speaker 1: being very like conservative or liberal in that estimate. I
Speaker 1: think we ended up paying closer to seven or eight
Speaker 1: thousand dollars just in the random fees that happened throughout,
Speaker 1: not including the down payment. So that was a bummer.
Speaker 1: Thankfully we had it. But yeah, it was even more
Speaker 1: than what I anticipated. Either way, I'm thrilled to be
Speaker 1: here and I think it went fantastic. So yeah, it's
Speaker 1: a lovely memory for me. Jen. Yeah I was. Actually
Speaker 1: I walked around and saw it for Jill, and yeah,
Speaker 1: we bought it in sight unseen. Um just did a
Speaker 1: video walk through with Jen on the phone showing it
Speaker 1: to me. I mean in the inspection period we could
Speaker 1: have backed out. We flew down, saw it we made
Speaker 1: an informed decision, but I was worried to get her
Speaker 1: down here. So so you made an offer site unseen,
Speaker 1: but you did see it. I think that's we signed
Speaker 1: the We did sign the contract, but we were able
Speaker 1: to get out of it within that ten day inspection
Speaker 1: period if for whatever reason. Yeah, and during that ten
Speaker 1: days you came down and saw the house. Correct. So
Speaker 1: there are a lot of people who want to buy
Speaker 1: a house site unseen and then just go and moved there,
Speaker 1: like move in after they close. And I am going
Speaker 1: to say that if you cannot afford to fly down
Speaker 1: to see the house, then you cannot afford to buy
Speaker 1: that house. You need to walk through it because Jen
Speaker 1: might think it's a great house and showed you the
Speaker 1: video and you're like, yeah, that looks pretty cool, But
Speaker 1: then you get there and you're like, what angle were
Speaker 1: you holding that camera? I thought there was another bedroom TheRoom.
Speaker 1: How do you make that that four square inch bathroom
Speaker 1: looks so big in the pictures? Like, there's a lot
Speaker 1: of value in walking through a house, especially if you're
Speaker 1: a first time HomeBuyer. Um, so I am very glad
Speaker 1: to hear that you walked through the house before you
Speaker 1: bought it when you could still get out of it,
Speaker 1: so we could still get out of it. I'm an
Speaker 1: agent and i have a client who's in San Diego.
Speaker 1: I'm doing the video walkthroughs for him, and then once
Speaker 1: we get a property out of contract, he'll come out
Speaker 1: and walk through it, and that is perfectly fine. Yeah,
Speaker 1: it actually was the opposite for us. I walked through
Speaker 1: and I was like, this is a dumpster fire. And
Speaker 1: Jill Jen walked through, but she's like, yeah, I don't know, guys.
Speaker 1: I mean the location is awesome, but they used to
Speaker 1: I mean they used to own a home renovation business.
Speaker 1: So I'm like, I guess you guys can do something
Speaker 1: with this. That was what it was. That's what it
Speaker 1: was like. Um to be a fly on the wall there,
Speaker 1: but now it's looking great. They were really doing what
Speaker 1: I thought that they could do, but I know I
Speaker 1: could not. So it's a little oasis. What about for you? Jen?
Speaker 1: So I had one of those whirlwind home buying experiences,
Speaker 1: like when your landlord calls you and says I want
Speaker 1: to turn my duplex into an airbnb, so you have
Speaker 1: six weeks to get out and so yeah, that's that
Speaker 1: was the start of our home buying journey, and it somehow,
Speaker 1: by the grace of God, all worked out and we
Speaker 1: were actually out in like I think it took. It
Speaker 1: was less than a month. It was less than a
Speaker 1: month from that call, but we got one. It was
Speaker 1: we had this arbitrary, like really low budget and we
Speaker 1: kept getting out bid and it was so low because
Speaker 1: we were paying off our debts, so we had no
Speaker 1: money saved. Everything was going towards the debt. But we
Speaker 1: were saving so much that we just stopped putting it
Speaker 1: towards the debt and we were like, Okay, well now
Speaker 1: we can just put it towards a home, and so
Speaker 1: we were. We were like three weeks stockpiling cash instead
Speaker 1: of like the three plus months people normally do it.
Speaker 1: And um, some how we found this house. It was
Speaker 1: not on the MLS. I don't I guess that's maybe
Speaker 1: common in Florida. But it was flipped, and normally the
Speaker 1: flips in St. Pete are horrible. They're just they're brown.
Speaker 1: They're very brown, and at least in two thousand seventeen
Speaker 1: they were I don't know now, but fast. They look
Speaker 1: good in pictures and then you get up close and yeah,
Speaker 1: job this one was gray. It was light gray everything,
Speaker 1: and I was like, gray, I can do so and
Speaker 1: it has it has this great courts, and so obviously
Speaker 1: I fell in love with the courts and I said,
Speaker 1: this is it. It was um like thirty grand above
Speaker 1: our arbitrary budget. But now when I look back and
Speaker 1: I look at real estate in St. Petersburg, Florida, I'm like,
Speaker 1: we should have bought three houses at this price. This
Speaker 1: is insane, Like you can't get you can't get a
Speaker 1: two one for this price. Now, yeah, it has gone
Speaker 1: insane in this area. Yeah, it's a it's insane. So
Speaker 1: we were really pleased with our first time home purchase.
Speaker 1: It was just so rushed and I wouldn't recommend anybody
Speaker 1: do it the way we did it. It was unreal.
Speaker 1: You didn't listen to Scott's arbitrary timeline thing, Jen I didn't.
Speaker 1: I had a hard and fast timeline. There was no
Speaker 1: going month to month, and we were already month to month.
Speaker 1: And that's why he was able to say I'm going
Speaker 1: to kick you out in six weeks. So it sounds
Speaker 1: it sounds like it was worked out for all of
Speaker 1: us with this first time home. I know, none of
Speaker 1: us have a nightmare experience. Wow, well done everyone, But
Speaker 1: it gives everybody encouragement who's about to embark on this
Speaker 1: that it can be done. And now you know more
Speaker 1: than at least the three of us. Scott knew some
Speaker 1: stuff going into his first home purchase, but you know
Speaker 1: more than we did, and you can go into your
Speaker 1: first home purchase a little bit wiser. And if you
Speaker 1: want to know even more, Scott and Mindy their book
Speaker 1: is amazing. So Scott, Mindy, how can people hear more
Speaker 1: from you and get your book? Yeah, you can find
Speaker 1: Mindy and I on the Bigger Pockets Money Show podcast
Speaker 1: Bigger Pockets Money Anywhere podcasts are hosted. You can also
Speaker 1: buy the book first Time HomeBuyer anywhere books are sold,
Speaker 1: or you've got a Bigger Pockets dot com slash fthb
Speaker 1: to buy it from Bigger Pockets and get a couple
Speaker 1: of extra goodies there. Yes, and if you're interested in
Speaker 1: anything real estate investing, house hacking, whatever, Bigger Pockets is
Speaker 1: definitely the place to go. So thanks so much for
Speaker 1: coming on. This was a really really good chat. Thank you,
Speaker 1: Thank you guys for having us who that was a
Speaker 1: lot and I hope that you were able to maybe
Speaker 1: pause and write some things down if you were not driving.
Speaker 1: I've got my own notes. I know that much for sure. Yeah,
Speaker 1: there were, while there's also so much just discussion, rich discussion,
Speaker 1: really amazing tangible tips about exit options and strategy and
Speaker 1: what we should be looking out for and how we
Speaker 1: can be prepared. Wish I would have listened to this
Speaker 1: podcast before I bought a home. I don't know that
Speaker 1: it would have changed much, but I think it definitely
Speaker 1: could have set my expectations more realistically. And I'm glad
Speaker 1: I didn't because then I would have been kicking myself.
Speaker 1: You might not have put pressure to buy a house.
Speaker 1: We sign yourself, but you know you've worked out and
Speaker 1: you've got a great home. Yeah, and in the end,
Speaker 1: it does work out. If buying a home is something
Speaker 1: you want to do, and I would strongly encourage you
Speaker 1: to get Scott Mindy's new book, First Time Home Buyer
Speaker 1: if this is something that you're looking to on the horizon,
Speaker 1: or get it for somebody else if you know somebody
Speaker 1: about to buy a house that may not have listened
Speaker 1: to this podcast. So thank you so much for listening,
Speaker 1: and also thank you for your kind reviews on iTunes
Speaker 1: and Stitcher, kind of like this one from z J
Speaker 1: khalid Uh. They say, fun frugal facts. It just happens
Speaker 1: to be five stars. This podcast showed up on my
Speaker 1: Discover page two weeks ago, and I'm so glad it did.
Speaker 1: It has it walked me through so many questions and
Speaker 1: curiosities I have in a fun and casual manner. I'm
Speaker 1: binging my way through the episodes, starting from the most
Speaker 1: recent to the oldest, and haven't found an episode I
Speaker 1: couldn't relate to. Thank you, ladies for the research you
Speaker 1: put into this to help others who are trying to
Speaker 1: live more affordable lives. Ah, such a great review. I'm
Speaker 1: so glad you found us. We've been on more than
Speaker 1: just the discovered page lately. On Apple podcast we were
Speaker 1: on the front page of Apple Podcasts, which, for I
Speaker 1: learned a month is a big deal. Also, I'm excited
Speaker 1: about that. So, if you recently found us, or if
Speaker 1: you're a long time person, we just want to thank
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Speaker 1: See you Next Week by Frugal Friends is produced by
Speaker 1: Eric syrian Um. I've got one minute, So this is
Speaker 1: the lighting round of the lightning rounds. What's one thing
Speaker 1: you wish that you would have known before you bought
Speaker 1: your house? I god, a lot of things like I
Speaker 1: should have. I wish I would have known I could
Speaker 1: choose my lender. I went with the lender from the
Speaker 1: broker that was recommended from the realtor, and it was
Speaker 1: Wells Fargo, and I don't like big banks, and so
Speaker 1: I wish I would have been prepared to know that
Speaker 1: I could go to my local credit union to get
Speaker 1: pre approved there, that it's just something I could do
Speaker 1: on my own. Jill, Yeah, I mean it's probably the
Speaker 1: same thing as what I said earlier in the podcast,
Speaker 1: just how much money it actually is going to cost
Speaker 1: beyond a down payment. I mean, we figured it out
Speaker 1: in the process, and but to have known even more
Speaker 1: so ahead of time, to have just a better estimate
Speaker 1: on how much it's going to cost outside of the
Speaker 1: down payment, I think would have been helpful. One way
Speaker 1: did get around that, and in my thirty second cap
Speaker 1: is that we actually negotiated with the seller to cover
Speaker 1: closing costs and that we would pay five grand more
Speaker 1: for the house. So that was something that we were
Speaker 1: able to work out. You can put it into the mortgage, yes,
Speaker 1: that can. That can be a workaround. So it's not
Speaker 1: the cheapest option, but and I don't recommend it, but
Speaker 1: it is an option. That's what we did, Oh kay, right,