Speaker 1: Welcome the Money and Wealth with John O'Briant, a production
Speaker 1: of the Black Effect Podcast Network and iHeartRadio. Yo Yo
Speaker 1: John O'Brien and this is money and Wealth, and this
Speaker 1: is my trending topic of the week. It's salute to
Speaker 1: Mike Epps and his wife Kira. They are doing it
Speaker 1: in Indianapolis. They are walking the talk of what I
Speaker 1: call the silver rights movement. I didn't say civil rights.
Speaker 1: The leaders of all of that movement are already established
Speaker 1: in history. I'm talking about making new history, from civil
Speaker 1: rights in the streets to silver rights SI L V
Speaker 1: E R in the suites, cutting a business deal. The
Speaker 1: new colors not black and white or redder blue.
Speaker 2: It's green.
Speaker 1: And we need some economic green in our neighborhoods invested
Speaker 1: in you know, the legal trade of capitalism and free
Speaker 1: enterprise that lift us up in a way that is sustainable.
Speaker 1: And Mike Epstein just talk about it. He's doing it.
Speaker 1: He and his wife went and bought six or more homes,
Speaker 1: at least six homes with his own paycheck over a
Speaker 1: period of time. He didn't do it all at one time,
Speaker 1: as he was, you know, doing comedy and doing movies
Speaker 1: and setting a little bit aside. He decided, and I
Speaker 1: think this goes back even to the nineties, to just
Speaker 1: buy a house, you know here, to buy a house there.
Speaker 1: Until he owned the block, most of the block that
Speaker 1: he grew up in. These the same blocks, same homes,
Speaker 1: or the same block. He said he was arrested a
Speaker 1: thousand times, same block where his.
Speaker 2: Grandmother owned a home.
Speaker 1: One of the homes he revitalized was for his grandmother,
Speaker 1: as I understand it, same block where he's seen, you know,
Speaker 1: go through all kinds of changes and transitions in the
Speaker 1: course of his life, from you know, doing really pretty
Speaker 1: good to pretty doing pretty crappy. And we complain about
Speaker 1: things like gentrification. By the way, gentrification is nothing wrong
Speaker 1: with that. Gentrification simply means a move in the middle
Speaker 1: class values. Actually we want that, We want homes and
Speaker 1: values to come up. We just wanted to include us
Speaker 1: when it happens and not replace us when it happens.
Speaker 1: And so sometimes you got to not just talk about
Speaker 1: being a PhD, but a PhD too. I like both
Speaker 1: of those things. I like people who do things. Mike
Speaker 1: did things, went and bought these properties, slowly invested here
Speaker 1: and there with his wife methodical about it, quiet about
Speaker 1: it even and then got AGTV inspired and involved in
Speaker 1: a new program I think they call buying back the Block.
Speaker 1: Check it out and check him out. They did it.
Speaker 1: And you know, as you can see, the black people
Speaker 1: who've benefited, white people who've benefited, you know, Asian India,
Speaker 1: everybody benefited, not just people who bought the homes and
Speaker 1: are living in the homes, people who worked on the homes. Plumbers, electricians, lighting, roofing.
Speaker 1: That's what I do with my own company. I try
Speaker 1: to make sure that half of all of my vendors
Speaker 1: at a promise homes company at least are minority in women,
Speaker 1: small businesses, plumbing, heating, landscaping, rooting, roofing. This is job creation,
Speaker 1: by the way, this is you know, wealth creation through contracts.
Speaker 2: Painting.
Speaker 1: Help me out here, I say landscaping already. Think about
Speaker 1: all the stuff that goes in roofing, into fixing and
Speaker 1: maintaining homes. And then once you do that, as you
Speaker 1: see checking out his video, once he did that, then
Speaker 1: the city you know, leaned in and they start, you know,
Speaker 1: upgrading the infrastructure. You start seeing parks show up in
Speaker 1: green spaces, right, you start seeing people with higher education
Speaker 1: and higher income moving back into the neighborhood. Now economic
Speaker 1: energy returns to the neighborhood, and so now nobody's getting
Speaker 1: kicked out. You've got people who live there who are
Speaker 1: middle income of working class and middle class. You have
Speaker 1: people working there on the homes in the neighborhoods who
Speaker 1: might be working class, might even be the working poor,
Speaker 1: but they're participating and benefiting as well. Now you've got
Speaker 1: a tax base for the city, so the city can
Speaker 1: now afford to have proper public services, garbage removal, making
Speaker 1: sure the lights that's in the street lights are fixed,
Speaker 1: to make sure that there's money for I've already said
Speaker 1: green space, public spaces. You know, frankly, the schools get inspired.
Speaker 1: You start seeing businesses move into areas like this to
Speaker 1: serve they look like, oh wait, check that out.
Speaker 2: They need to.
Speaker 1: You know, you start seeing coffee shops show up in
Speaker 1: little corner shops, and boutiques and hair salons and barbershops.
Speaker 1: All that stuff starts to move in when poverty and
Speaker 1: problems move out. Prosperity moves in when problems move out.
Speaker 1: That's not a black, you know situation, or a white situation,
Speaker 1: or a Latino situation or Asian situation. It's an aspirational situation.
Speaker 1: And Mike and his wife have shown you how to
Speaker 1: do it right and make it tight and making smart
Speaker 1: sexy again and doing it in a way that actually
Speaker 1: enhances their economic plight like that, doing it right and
Speaker 1: increasing their economic might. And I'm not trying to be
Speaker 1: a rapper. It just so happens that, you know, sometimes
Speaker 1: when you do it right, it is cool and smooth.
Speaker 1: So tip my brother, tip my brother killer Mike. Don't
Speaker 1: get mad at me because I'm rapping a little bit
Speaker 1: in rhyming a little bit. I'll never be a challenge
Speaker 1: to your talent on rocking the mic. But don't you
Speaker 1: rock this this economic pen that I've got over here?
Speaker 2: When I might, I might have something for you. All right?
Speaker 1: Back to the story. The Epps family now have increased
Speaker 1: their net worth these homes that they bought for next
Speaker 1: to nothing, I hope you know. So there's the nineties,
Speaker 1: so we're going back almost thirty years, these accumulating it
Speaker 1: over time that they hopefully bought next to nothing. I
Speaker 1: hope they did, you know. Now they've invested. Now HGTV
Speaker 1: hopefully has invested because it's it's good for the network.
Speaker 1: The equity I keep talking about in real estate investment
Speaker 1: goes to the Epps family, it also goes to anybody
Speaker 1: else who's buying a home in that neighborhood that gets
Speaker 1: a knock on effect, meaning in other words, if the
Speaker 1: house next door to you gets improved, then you may
Speaker 1: want to improve your house, but certainly it improves the
Speaker 1: value of your house. If the house next door's got
Speaker 1: one hundred thousand dollars of rehabilization and improvement going into it,
Speaker 1: and then you're going to get some kind of halo
Speaker 1: effect on your house. You know, you may get a
Speaker 1: twenty thirty thousand dollars pop in value in your house
Speaker 1: because somebody put one hundred thousand dollars in the house
Speaker 1: next door. You did nothing. If you then improve your
Speaker 1: house with some new paint and some landscaping, you may
Speaker 1: get a pop of thirty or forty thousand dollars. I'm
Speaker 1: talking about homes that are you know, one hundred and
Speaker 1: two hundred thousand dollars three hundred thousand dollars in range
Speaker 1: at the moment, which sounds to me and looks at
Speaker 1: me based on what I'm seeing is going on in
Speaker 1: this neighborhood in Indianapolis that the EPP's family is revitalizing,
Speaker 1: and so as it comes up, they come up. As
Speaker 1: the community does well, they do well. That's good doing
Speaker 1: well and doing good. I keep saying that good capitalism
Speaker 1: is where I benefit and you benefit more. Bad capitalism
Speaker 1: is I benefit, you pay a price for it. This
Speaker 1: is good capitalism. Back capitalism is you know, drug dealing,
Speaker 1: is you know, rent to own stores, title lenders, liquor stores, pawnshops,
Speaker 1: you know check cashers, Not all check cashers, but the
Speaker 1: predatory ones, you know, title lending stores, and all these
Speaker 1: folks praying on our neighborhoods and low credit score neighborhoods.
Speaker 1: This guy is actually raising the credit score, raising the
Speaker 1: economic energy of this neighborhood. It will attract investors, as
Speaker 1: I said, it will attract involvement, positive involvement by the city.
Speaker 1: The police will be more respectful. I guarantee you right,
Speaker 1: Mike's not gonna have any problem in this neighborhood. I
Speaker 1: guarantee you. But people who live in this neighborhood are
Speaker 1: not going to have any problem with They're taxpayers. Hello,
Speaker 1: So what do you think about this. I mean, what's
Speaker 1: your opinion on this? But I'm just really excited about it.
Speaker 1: And he's my profile of the week of a celebrity
Speaker 1: doing it right. Happens to be a black celebrity as well.
Speaker 1: Who understands that he can't just cash the check. He's
Speaker 1: got to write some You can't just make the money
Speaker 1: during the day. You got to build wealth in your sleep.
Speaker 1: You got to you know, in real estate is the
Speaker 1: easiest way, well one of the easiest way to do it,
Speaker 1: in providing affordable housing to people. And it's just like
Speaker 1: plus plus plus everybody wins when you buy back the block.
Speaker 2: Be inspired.
Speaker 1: I am, hey, this is John O'Bryant. And there's a
Speaker 1: lie that's been told to working class and even middle
Speaker 1: class families and certainly the so called poor. Don't own
Speaker 1: a home. Don't buy a home. It's a bad investment,
Speaker 1: it's a bad bet. Enjoy your life. Don't buy a home.
Speaker 1: By the way, everybody telling you to not buy a
Speaker 1: home on TV, on the news owns a home. Everybody
Speaker 1: telling you not to buy a home owns a home.
Speaker 1: Don't take my word for it. In this digital world
Speaker 1: we live in now, and also inner city world we
Speaker 1: live in now because by the way, the wealthiest neighborhoods
Speaker 1: and France or places called Paris, that's an inner city.
Speaker 1: The wealthiest places in the UK United Kingdom, places like
Speaker 1: London in the inner city. It goes on and goes
Speaker 1: on and goes on. Inner cities all around the world
Speaker 1: are invaluable, but we put the world. American leaders put
Speaker 1: poor people, so called poor people, blacks and browns in
Speaker 1: inner cities in the twentieth century and move to the suburbs.
Speaker 1: Only realize with traffic and congestion they want to move
Speaker 1: back to centrally located real estate. I'll get to that
Speaker 1: in a minute, which means our real estate is actually invaluable,
Speaker 1: but we are actively giving it away. But I'm getting
Speaker 1: ahead of myself. In this digital world we live in,
Speaker 1: you can get most information at your fingertips. So if
Speaker 1: you see somebody on television telling you that home ownership's
Speaker 1: a bad bet, use your smartphone to be smart. Use
Speaker 1: it for something other than checking out you know, the
Speaker 1: most interesting stats on sports, which is cool, or seeing
Speaker 1: the best you know, the most recent concert or music videos,
Speaker 1: which is cool. Use it to make smart sexy, to
Speaker 1: understand what somebody's telling you whether it's a lie or not.
Speaker 1: Look up the person, look up the broadcaster or the
Speaker 1: TV personality and see if they own a home. You
Speaker 1: put in their name and put in home and see
Speaker 1: what comes up. And if somebody's a public figure, you know,
Speaker 1: in you know, eight times out of ten it'll tell you, yeah,
Speaker 1: this person owns a home, and our multiple homes. How
Speaker 1: do I know that? Because the number one business in
Speaker 1: the world is real estate. The number one business in
Speaker 1: the world is real estate, all right in the world,
Speaker 1: and it's been that way for at least the last
Speaker 1: seventy five years. The number one sector, the biggest business
Speaker 1: sector in the world, right, not technology, not healthcare, not music,
Speaker 1: not entertainment, not you know, whatever it is you're interested in,
Speaker 1: None of that. The biggest industry, the biggest sector in
Speaker 1: the world. It's real estate. The number one way that
Speaker 1: millionaires become such. And I know as much because I
Speaker 1: am one. It's real estate. I happen to be, in
Speaker 1: addition to being the founder of Operation Hope, the largest
Speaker 1: minority owner. I think this is still true. It was
Speaker 1: true certainly a year ago or two years ago, and
Speaker 1: I sold the company. The largest minority owner of single
Speaker 1: family rental real estate in America single family homes. Sorry,
Speaker 1: is the largest owner of single family rental homes in
Speaker 1: America is me. It was a Promise Homes company. I
Speaker 1: built the company from twenty seventeen to twenty I sold
Speaker 1: it to twenty twenty one for one hundred and twenty
Speaker 1: one million dollars, did a twenty million dollars credit facility
Speaker 1: financing to recapitalize the company. Became a partner in the
Speaker 1: new company with my new partners. I owned the company myself.
Speaker 1: Now I own it with partners, but we owned, you know,
Speaker 1: at one point we own a little less than now
Speaker 1: seven hundred homes in Georgia, Greater Atlanta, in Florida. And
Speaker 1: I started this, you know, I started my quest with
Speaker 1: one home, right we'll actually a condo. Then went from
Speaker 1: one condo to a condo and an investment property, and
Speaker 1: then three properties and then five and okay, then I
Speaker 1: you know, decided to go into a business and then
Speaker 1: went on supercharge mode. And my goal is actually ten
Speaker 1: thousand homes now. But that's a whole other conversation for
Speaker 1: another time. That it's not the strategies I'm talking to
Speaker 1: you about. Now I'm just telling you I know what
Speaker 1: I'm talking about. In that operation Hope, we've helped, you know,
Speaker 1: literally thousands of people become homeowners with prime rates because
Speaker 1: we helped them get their credits corrupt, their debt down,
Speaker 1: their savings up. Okay, back to the topic, because all
Speaker 1: those just underscoories that I know what I'm talking about, right,
Speaker 1: and I want you to listen. I want you to
Speaker 1: pay attention. My mother, who worked an hourly job, wanted
Speaker 1: to smith an hourly job job, I mean Donald Do's aircraft,
Speaker 1: bought and sold seven homes, making the equivalent of eighteen.
Speaker 2: Dollars an hour.
Speaker 1: And when she passed away September twenty twenty three, guy
Speaker 1: rest her soul. An amazing woman. She died, you know,
Speaker 1: with the equivalency of a rollup of a million dollar
Speaker 1: net worth, meaning she'd accumulated a million dollars in assets
Speaker 1: and distributed to her children and others that she loved.
Speaker 1: But when she passed away working an hourly job, because
Speaker 1: of real estate, she could put her kids into homes.
Speaker 1: She did that for my sister and my brother, helping
Speaker 1: them buy homes multiple times. And I watched her buy
Speaker 1: and sell homes it gave her financial freedom and retire
Speaker 1: in dignity right. And she did it as a working
Speaker 1: class woman. So because my grandmother was on a shotgun shack,
Speaker 1: my mother owned seven homes. I then owned seven hundred
Speaker 1: because now I knew what I could do and I
Speaker 1: built on that success. Can I get an amen? This
Speaker 1: is what this is a church that was happening. Now
Speaker 1: what have you done for me lately? So I know
Speaker 1: it can be done and I have done it. I'm
Speaker 1: not somebody talking about it read about it in the
Speaker 1: book giving you a motivational speech. I'm telling you that
Speaker 1: I made good moves and bad I'm gonna tell you
Speaker 1: about a couple of them in this podcast. Almost lost
Speaker 1: my rear end and would have had to file bankruptcy
Speaker 1: if the if the lender had not been gracious towards
Speaker 1: me when I was building a three unit apartment building.
Speaker 1: I don't want to commend that lender. It was actually
Speaker 1: Wills Fargo. It was a banker at Wells Fargo who
Speaker 1: saved my bacon when I was building a home for
Speaker 1: my father to live in. And again I'll get to
Speaker 1: that story in a minute, but you know I came
Speaker 1: very close to losing it all. I also made it big,
Speaker 1: so almost lost it big there, but I also made
Speaker 1: it big. That was a construction loan, big relatively speaking.
Speaker 1: When I bought a home, you know, a condo townhouse home,
Speaker 1: I was living in an apartment and I moved and
Speaker 1: got this home and I paid you know, two hundred
Speaker 1: and twenty thousand dollars for it in Los Angeles on
Speaker 1: lati hera boulevard righted Lati here in four or five
Speaker 1: for anybody knows Los Angeles. And then when the economy
Speaker 1: took a dive, everybody was saying, you need to sell
Speaker 1: the house two thousand and eight, you need to sell
Speaker 1: the house. Get out of the house, all my poor friends,
Speaker 1: and you know, sell get out, get out, get out. No, no, no,
Speaker 1: Warren Buffet says, when people are greedy, be afraid. When
Speaker 1: people are afraid, be greedy. I just doubled down, right.
Speaker 1: I had a tenant in it. I figured, you know,
Speaker 1: I'll just hold on to it. And you know, it
Speaker 1: went down to one hundreds of one thousand dollars. Everybody's like,
Speaker 1: get out, get out. But I had a tenant covering
Speaker 1: the rent, right, okay, all good, And I was still
Speaker 1: getting tax benefits from it. I'll get to that in
Speaker 1: a minute, also the tax benefits of ownership. I held
Speaker 1: on and somewhere around twenty fifteen, I went back to
Speaker 1: check on the property again. This so this, this is
Speaker 1: you know, now to economic crisis two thousand and eight,
Speaker 1: two thousand and nine, lost my shirt. Supposedly I didn't
Speaker 1: lose my shirt. I still owned the property and it
Speaker 1: was I had a tenant in it in the property,
Speaker 1: and so the rent was being covered. Twenty and fifteen,
Speaker 1: twenty sixteen, I decided to cash out by another property.
Speaker 2: Do you know?
Speaker 1: I sold that property for seven hundred and fifty thousand
Speaker 1: dollars Hello, bought it for two twenty went down to
Speaker 1: one hundred and something. If if I'd listed that bad
Speaker 1: advice from my so called friends, if you hang around
Speaker 1: nine broke people, you'll be the tenth. You know, good people.
Speaker 1: I love my people. But they gave my friends were
Speaker 1: giving me bad advice because they didn't know better, so
Speaker 1: couldn't do better. They weren't financial geniuses, and they couldn't
Speaker 1: give me financial genius advice and give me be cool advice.
Speaker 1: How to address advice, how to hang out advice? A
Speaker 1: lot of other good advice, maybe even how to parent advice.
Speaker 1: I'm sure they give me a lot of great advice,
Speaker 1: but real estate advice was not one of the ones
Speaker 1: they could give me. Investment advice was not one of
Speaker 1: the ones they could give me. And I knew better
Speaker 1: than to pay attention to what they were saying, as
Speaker 1: an old Southern saying in a blind town of one
Speaker 1: eyed man's king, if you don't know better, you cannot
Speaker 1: do better.
Speaker 2: Right.
Speaker 1: And no matter how much I love you, my son
Speaker 1: and my daughter, if I don't have wisdom, all I
Speaker 1: can give you is my own ignorance.
Speaker 2: That's right.
Speaker 1: So we passed down bad habits from generation to generation
Speaker 1: out of love. We passed down bad habits to you.
Speaker 1: Please tell me you're hearing what I'm saying. It's so
Speaker 1: important that you understand. The egos don't fly in packs.
Speaker 1: You've never seen a flock of eagles.
Speaker 2: Right. You're going to be alone in.
Speaker 1: Some of these decisions. You're going to be a solo player.
Speaker 1: People should tell me, oh, come on party with us,
Speaker 1: come on hang out. No, I'm I'm good. Enjoy yourself.
Speaker 1: And I was by behind that computer trying to figure
Speaker 1: out what was going on. Now I don't have to
Speaker 1: go to the club I can own it, right, And
Speaker 1: the people who you choose used to go to the
Speaker 1: clubs and wanted me to go with them, are now
Speaker 1: coming to me asking me for a job.
Speaker 2: And that's been for successive years. Right.
Speaker 1: So you know, only in the dictionary does the word
Speaker 1: success come before the word work, because it's alphabetical. I'll
Speaker 1: repeat that, Only in the dictionary does the word success
Speaker 1: come before the word work, because it's alphabetical. So I
Speaker 1: give you one example of how I took a modest investment.
Speaker 1: I went from renting in an apartment in van Ies
Speaker 1: believe it was, and buying us a townhouse for a couple,
Speaker 1: you know, a couple hundred thousand dollars, having that property
Speaker 1: go down in value, holding on to it, moved to
Speaker 1: I think Atlanta rented that townhouse out right, but kept
Speaker 1: it and then turned around and that property has literally tripled,
Speaker 1: more than tripled in value when I sold it for
Speaker 1: seven hundred and fifty thousand dollars, and then in up
Speaker 1: parleying that into a tax exchange. I think it's called
Speaker 1: ten thirty one tax free exchange. I think it's what
Speaker 1: it's called it's a tax free exchange where you can
Speaker 1: buy one property with the proceeds from the property you
Speaker 1: just sold and you don't pay taxes on it. And
Speaker 1: I ended up leveraging that up into a multimillion dollar investment.
Speaker 1: So that little two hundred thousand dollars townhouse morphed into
Speaker 1: a multimillion dollar investment. And that's not the Promise Homes
Speaker 1: company I'm telling you about right now. Where else can
Speaker 1: you do that? And then the piece where I lost
Speaker 1: my shirt, I'll just tell you this, I almost lost
Speaker 1: my shirt. Then I would get into the basics of
Speaker 1: why you should own a home. My dad made some
Speaker 1: financial mistakes, made some mismoves or some bad moves. A
Speaker 1: good guy, but was not financially literate. Nobody taught him
Speaker 1: how money works, so it wasn't his fault. But he
Speaker 1: didn't know better, so couldn't do better. So I'm not
Speaker 1: blaming it on you. I'm telling you that this is
Speaker 1: in my own family. We're not ashamed of it because
Speaker 1: he just didn't know any better. And he worked his
Speaker 1: whole life working in construction on his own business, meeting
Speaker 1: a payroad to where I learned how to do it,
Speaker 1: and payroll was every race of people out of the
Speaker 1: front door of our home. So race to me was,
Speaker 1: you know, not a negative thing. I had no problem
Speaker 1: with white people or Asians or that they knows or whatever.
Speaker 1: They all worked for my dad, so the color was green.
Speaker 1: But my dad couldn't keep the money. He made a dollar,
Speaker 1: spend a dollar fifty. The more money we made, the
Speaker 1: broker we got right, and he ended up, you know,
Speaker 1: fast forward, living with this lady. He was dating my
Speaker 1: mom and Dady divorced, and she controlled his life. Like
Speaker 1: I'll say, it's like he was pimping him, like, you know,
Speaker 1: she be my boyfriend. By the way, I'm giving you housing, right,
Speaker 1: So he lived in a house that she controlled. She
Speaker 1: didn't live there, she controlled it and she controlled him.
Speaker 1: I said, oh no, we're not doing this. So with
Speaker 1: my dad's permission, I bought the house from the lady.
Speaker 1: But then I realized I couldn't just subsidize this payment
Speaker 1: every month of the more. So I learned the rules.
Speaker 1: I learned the you know, get the memo on money.
Speaker 1: That's my I think it's my fourth book, the memo
Speaker 1: Get that Right, And and learned the game built the
Speaker 1: knock three walls down, keep one wall up, and build
Speaker 1: a three unit apartment building around the remaining wall. Turned
Speaker 1: it into an income producing property. Was my strategy. Let
Speaker 1: my dad live in the front unit and I'd rent
Speaker 1: out the other two. Actually was supped to be a
Speaker 1: four unit building, but my dad screwed up the sooning
Speaker 1: ordinance and I ended up having to go from four
Speaker 1: units to three. The numbers still work. He would live
Speaker 1: in the front unit for free. The other two units
Speaker 1: would pay the mortgage payment and you know, property taxes
Speaker 1: and maintenance and little income. Not bad, right, Well, I
Speaker 1: let my dad emotional decision. Who was a you know,
Speaker 1: it was a construction guy. He knew what he was doing,
Speaker 1: but I let him manage, not the job of construction.
Speaker 1: I let him manage the money. And make a long
Speaker 1: story short, he ran through six hundred and fifty thousand
Speaker 1: dollars a construction loan. OUCH did not finish the project.
Speaker 2: Ouch.
Speaker 1: I had to go back to the lender, Tom Swanson,
Speaker 1: that's the guy's name. If Tom, are you listening to this,
Speaker 1: God bless you, brother? And I had to get and
Speaker 1: luckily values at this time were going up, so he
Speaker 1: got that property reappraised, and luckily it reappraised higher, so
Speaker 1: I got a refinanswer the construction loan. If I couldn't
Speaker 1: do that, I would have had to file bankruptcy. Reefin
Speaker 1: answer the construction loan and got just enough proceeds to
Speaker 1: finish the job, get a permanent loan put on the property,
Speaker 1: paid off the construction loan. I also gave my dad
Speaker 1: a americ Express credit card six thousand dollars limit. He
Speaker 1: ran that up to the limit, and I mean, this
Speaker 1: is back with six thousand dollars, it might as well
Speaker 1: have been six million, And I mean, money really does
Speaker 1: create drama in relationships, like the number one cause of divorces.
Speaker 1: Money like this really created a problem with me and
Speaker 1: my dad. But he's my father, so I couldn't be disrespectful.
Speaker 1: But I'm like, he was being disrespectful to my wallet
Speaker 1: and he met well, but just you know, just financially illiterate.
Speaker 1: So I had to like learn to give him money,
Speaker 1: but not a credit card, you know, give him, you know,
Speaker 1: a gift card that you know, money on it loaded,
Speaker 1: but nothing more.
Speaker 2: You know.
Speaker 1: I had to be you know, I had to find
Speaker 1: ways to let them live in dignity but not to
Speaker 1: have an open credit line. So I finished that and
Speaker 1: was able to sell that property later on and clear
Speaker 1: all my debts in his By the way, he died,
Speaker 1: got rest his soul in dignity at eighty nine years
Speaker 1: of age in a home that you know he controlled.
Speaker 1: So why should you want to own a home because
Speaker 1: everybody else who's got wealth does. Let's start there, because
Speaker 1: it's a number one ways you build wealth in America? Right,
Speaker 1: Why should you want to own a home because when
Speaker 1: you buy a home, you get the benefit of depreciation,
Speaker 1: the tax benefit. The tax system was created to benefit homeowners.
Speaker 1: You get the benefit of depreciation, tax benefits, You get
Speaker 1: the benefit of appreciation, the increase in value of that home.
Speaker 1: I'm going to break this stuff down. I talk to
Speaker 1: you in plain English. You know, if you have a
Speaker 1: thirty year mortgage, on average fifteen certainly twenty years of
Speaker 1: that mortgage, you write office mortgage interest. Twenty of a
Speaker 1: thirty year mortgage is mortgage interest. Well, you write that
Speaker 1: off against your taxes, against your income. So you're going
Speaker 1: to get a lot of that money back as a
Speaker 1: tax refund. You can't get that back if you're renting,
Speaker 1: if you're renting from me, and I'd love you to
Speaker 1: be a renter for me, right, But at some point
Speaker 1: I want you to leave. I want you to go
Speaker 1: from rent to own. But you're reading for me, or
Speaker 1: you're renting from someplace you can't afford, a neighborhood that
Speaker 1: don't want you with money. You don't have to press
Speaker 1: people you don't know about stuff that don't matter, right,
Speaker 1: real talk. So you're writing in this skuy scrape or
Speaker 1: somewhere with a dormant, right, yeah, but you don't have
Speaker 1: a dormant. You also, you also want a window taker
Speaker 1: because you're opening that window and somebody's taking your money
Speaker 1: as you throw that money for rent out the window
Speaker 1: every month. By the way, I was a renter. There's
Speaker 1: a time to be a renter. You just shouldn't be
Speaker 1: a renter for your entire life, in my opinion. So
Speaker 1: if you consider yourself an ALLC A limited liability corporation,
Speaker 1: consider yourself a business. Right, where are your assets? Your
Speaker 1: assets cannot be on your ass. You've got to own something.
Speaker 1: And you build wealth in your sleep. You make money
Speaker 1: during the day, you build wealth in your sleep. It's
Speaker 1: called appreciation compounding, right, Stocks home ownership, bonds, businesses, real estate,
Speaker 1: even education, higher education compounds. That's an investment. You know,
Speaker 1: only in real estate are you going to get this
Speaker 1: kind of secured opportunities. You know, real estate has never
Speaker 1: gone down in value in the history of the modern
Speaker 1: world in America. Now, somebody's going to say, now we
Speaker 1: got John, this is wrong, right, there was a crisis
Speaker 1: in two thousand and eight. There's a crisis in you know,
Speaker 1: whenever you know two thousand No, there's a crisis. Right
Speaker 1: in real estate. It goes up, there's a crisis, it
Speaker 1: dips right down, right as it did in my situation.
Speaker 1: And then when it corrects, it always corrects above the line,
Speaker 1: which means that it goes back up above the dip
Speaker 1: and typically breaches the value that you bought it for
Speaker 1: if you hold on to it long enough, because they
Speaker 1: just aren't growing in any more land it's fine, and
Speaker 1: it is secured investment. And again, for all the reasons
Speaker 1: I just mentioned you, the tax system is designed to
Speaker 1: benefit real estate owners, specifically home ownership. Now I'm going
Speaker 1: to tell you in short order why people benefit from
Speaker 1: you not understanding this game. And this is not a
Speaker 1: racial comment of making I'm just saying that some people
Speaker 1: understood this game and other people did not. After the
Speaker 1: Civil War, I want to make this really quick. After
Speaker 1: the Civil War, you had forty acres in a mule.
Speaker 1: And I'll do this in a separate podcast around the
Speaker 1: Freedmans Bank. It was Field Action fifteen in Savannah, Georgia,
Speaker 1: twenty four former slaved ministers asked by Secretary of War
Speaker 1: Stanton General Sherman, what do you want after slavery?
Speaker 2: What do you want? Do you want? Do you want
Speaker 2: an apology? You want?
Speaker 1: Well for no, no, no, no, we want land. We
Speaker 1: want to do for ourselves. So they ultimately got forty
Speaker 1: acres for each family, a couple order bucks for seeds
Speaker 1: and things like the seed corn for the land to
Speaker 1: grow and the nurture. And they worked that land so
Speaker 1: hard they were ultimately given a mule like a tractor
Speaker 1: because they were so industrious. When Lincoln was assassinated a
Speaker 1: year later, that rule was reversed in the former slave
Speaker 1: owning landowners ended up getting that land back plus some money.
Speaker 1: Now that's not what this podcast is about. That's not
Speaker 1: what this episode's about. But the reason I'm telling you
Speaker 1: that story is some people think that four million slaves
Speaker 1: got forty acres and a mule no no, no, no.
Speaker 1: Eighteen thousand families split up four hundred thousand acres. And
Speaker 1: that land was reversed after they got it. And it
Speaker 1: wasn't even good land. It was along the ocean around
Speaker 1: North Carolina, South Carolina. It was a coastal property. It
Speaker 1: was just hard to you know, grow agriculture on. But
Speaker 1: we took it and ran and worked it anyway, because
Speaker 1: we we've been doing so much with so little for
Speaker 1: so long. We can almost do anything with nothing. Meaning
Speaker 1: African Americans were very industrious, but they took that back.
Speaker 1: Why am I telling you that story because soon after that,
Speaker 1: a couple of years after that, there was a Homestead
Speaker 1: Act about two hundred and seventy million acres ten percent
Speaker 1: of all land in America given to anybody read mostly white.
Speaker 1: Ninety nine point something percent of all the recipients of
Speaker 1: the Homestead Act where white settlers that were going west
Speaker 1: would get I think it was six hundred and sixty
Speaker 1: acres as I'm right, if I'm correct, You had to
Speaker 1: work the land. The government created institutions of agriculture. They
Speaker 1: created basically mentors business mentors for agriculture in these counties.
Speaker 1: That would help new farmers to understand how to own
Speaker 1: and grow the land. But you got this land for
Speaker 1: free and two hundred and seventy million acres and one
Speaker 1: point five million families took the two hundred and seventy
Speaker 1: million acres and I think it was six thousand families
Speaker 1: if I got that number right, were black of one
Speaker 1: point five million total families that got a plot of land,
Speaker 1: which is upwards of one hundred million beneficiary families today.
Speaker 1: It's a whole another conversation, but that land represents ten
Speaker 1: percent of all land in America. That was a homestead Act.
Speaker 2: Okay.
Speaker 1: Now you fast forward to the early twentieth century and
Speaker 1: you had mortgages from the government part of the New
Speaker 1: Deal and the FAHA fair Uh, the FAHA, I think
Speaker 1: it's a fair housing Federal Housing Authority what is called.
Speaker 1: I'm doing this without notes, so and this is all
Speaker 1: memory and my knowledge and the FAHA. Unlike the rumor
Speaker 1: that banks created red lining, the federal government created red
Speaker 1: lining because the federal government said they would ensure mortgages
Speaker 1: right in neighborhoods. But if a neighbor was viewed as
Speaker 1: as risky or you know, dangerous. They would put whether
Speaker 1: there was a green, there were green neighborhoods. Guess where
Speaker 1: those were. There were yellow, you know markings. Those were
Speaker 1: sketchy but you know, debatable, and then they were red.
Speaker 1: Oh no, that's a no go zone. And the government
Speaker 1: refused to finance, I'm sorry, to guarantee of mortgage in
Speaker 1: those neighborhoods. Well, guess where the banks refused to make mortgages.
Speaker 1: It wasn't necessarily racial, but if you're in a red
Speaker 1: zone and the government's not gonna guarantee of mortgage, then
Speaker 1: the bank's not gonna lend on a home in that
Speaker 1: area on a mortgage. They got to go to where
Speaker 1: it's safe. Because money is a coward. Money wants to
Speaker 1: be safe. I understand that. So money would go to
Speaker 1: what would in this case be white neighborhoods, and they'd
Speaker 1: make the mortgages there. So where do you think the
Speaker 1: values went up? The values went up in the white
Speaker 1: or the green neighborhoods, which happened to be mostly in
Speaker 1: this cave, you know, example, white homeowners, and it went down.
Speaker 1: It was depressed in black neighborhoods, all right, And then
Speaker 1: you had covenants, restrictive covenants on homes that Blacks cannot
Speaker 1: buy in these green neighborhoods. As a whole nother game.
Speaker 1: And then you come up through World War two and
Speaker 1: the GI Bill ninety nine. You know, percent of all
Speaker 1: the GI Bill recipients were non black White. This is
Speaker 1: where the middle class was created. Again, this is not
Speaker 1: a this is not a white versus black thing. This
Speaker 1: is a green thing. I'm just giving you a history
Speaker 1: lesson of why black people have a net worth that is,
Speaker 1: you know, a mere fraction of white net worth because
Speaker 1: you know, in one of these areas of home ownership,
Speaker 1: we have not either taken advantage of it or mostly
Speaker 1: it's been denied of it. Right now, we're not taking
Speaker 1: advantage of it. Forty one forty three percent of all
Speaker 1: home ownership is black compared to seventy five percent of
Speaker 1: our mainstream count of parts. But in history, right, you
Speaker 1: know civil rights moving in before it was restricted from us,
Speaker 1: it was kept from us. But I'm demystifying the game.
Speaker 1: I'm telling you now how this game is played. And
Speaker 1: if you have good credit, the bank will just say yes. Right,
Speaker 1: So the colors green. The playing field is more leveled
Speaker 1: today than it has ever been. My mother's story is
Speaker 1: an example of what I'm telling you, right. My story
Speaker 1: is an example of what I'm telling you right. And
Speaker 1: by the way, there's more poor white people than poor
Speaker 1: anybody else, and they suffer from the same problem because
Speaker 1: they never got the memo on money. That's another video
Speaker 1: for another podcast or another time. I don't know anybody
Speaker 1: here thinking that this is John making a case against anybody.
Speaker 1: I'm making a case for you. I'm trying to not
Speaker 1: emotionally explain to you how bad things can happen to
Speaker 1: good people. So you had you know this. You know,
Speaker 1: the government for the GI Bill, will give you a
Speaker 1: mortgage and an education, sponsor you in the college and
Speaker 1: get you through college for the skill of marketable skill,
Speaker 1: and give you more to become a homeowner. And that's
Speaker 1: where you know, broadly define we can see the white
Speaker 1: middle class really emerged from and then black middle class
Speaker 1: came from, you know, in large part the civil rights movement,
Speaker 1: getting people and educated and all that stuff. But we
Speaker 1: learned the cash a check, not to write it. I'm
Speaker 1: going to teach you how to to cash a sustainable check.
Speaker 1: You know, the upgradious skills, but also learn how to
Speaker 1: teach you how to do what I do, which is
Speaker 1: to write the check. I'm an employer. I have hundreds
Speaker 1: of employees. FOREI undred employees just in my in my companies,
Speaker 1: my direct companies and organizations payroll. You know, I'm not
Speaker 1: afraid to say it, A million dollars every couple of weeks.
Speaker 1: I've been doing this for thirty years, so I know
Speaker 1: what I'm talking about. I made good choices and bad,
Speaker 1: and I'm telling you that that one of the choices
Speaker 1: you need to make, if you're listening to this, is
Speaker 1: to own a home. Now, somebody's going to say, here, ah, John,
Speaker 1: I don't know what he's talking about. You know, I
Speaker 1: don't want to own a home. I hear this all
Speaker 1: the time. I don't want to own a home. The
Speaker 1: bank owns a home. This is a game, This is
Speaker 1: a scam. I don't own a home. The bank owns
Speaker 1: a home. If you don't pay yeah, I said it,
Speaker 1: if you don't pay the mortgage, Yes, the bank owns
Speaker 1: a home. As I would do, as I said in
Speaker 1: a session with my brother Ti at our whole Global Forum.
Speaker 1: You know, I if I lend you money to buy
Speaker 1: a home and you don't pay me, I'm going to
Speaker 1: own your home.
Speaker 2: Right.
Speaker 1: It's not personal, this is business. The color is not
Speaker 1: black or white, or red or blue as in race
Speaker 1: or politics. The colors green as in US currency, at
Speaker 1: least in America. The color is green. It's economics, right,
Speaker 1: And so as long as you pay that mortgage. Right,
Speaker 1: and before interest rates went up, it was cheaper to
Speaker 1: own a home than it was to rent. Now, you know,
Speaker 1: you got to be more careful than thought about it,
Speaker 1: thoughtful about it. But I can still guarantee you that
Speaker 1: over the long term, it's always cheaper to own. Well, sorry,
Speaker 1: it's always a better investment own. It may not be
Speaker 1: cheaper on a cash on cash basis in the short term,
Speaker 1: but your rental property is not your rental property, and
Speaker 1: it's not going to appreciate in your pocket. Right, So
Speaker 1: you're just living in the moment. I'm telling you, here's
Speaker 1: your plan. If you're a working class person, if you're
Speaker 1: a middle class family and you're listening to this podcast,
Speaker 1: here's your business plan. I want you to buy a home,
Speaker 1: and I want you to buy the best house on
Speaker 1: the worst block. Right, So, if you're going to a
Speaker 1: middle class neighborhood by the worst house and the best
Speaker 1: block in rehabit and live in it. Or if you're
Speaker 1: in the hood, right you would define a house on
Speaker 1: that block and rehabit and live in it, but preferably
Speaker 1: the best house. I'll get back to that that strategy
Speaker 1: one second. But buy the best house right that you can,
Speaker 1: that you can afford, so you don't have any deferred maintenance,
Speaker 1: but rehabit and live it or sorry, upgrade it. Yeah,
Speaker 1: you know, make that as part of the acquisition that
Speaker 1: you build enough in for painting and anything that needs
Speaker 1: to be needs to you know, get an inspection on
Speaker 1: the house, right, get pre approved. Operation can help you
Speaker 1: do that for free. If we get your credit screw
Speaker 1: up above seven hundred seven fifty for sure. Used to
Speaker 1: be just seven hundred, but now that interest rates have changed,
Speaker 1: it might be a little bit above seven hundred. We'll
Speaker 1: get you a prime mortgage. Right, We'll get your mortgage
Speaker 1: like every other successful aspiring person in America. Right, not
Speaker 1: when he's homeboys shopping at word mortgage is a good
Speaker 1: one right now, one that it explodes on car loans.
Speaker 1: We used to say, no, that's not a Mercedes in
Speaker 1: the hood. That's a mercy these payments. That's what I'm
Speaker 1: gonna do a whole thing on auto loans and how
Speaker 1: that game really, how car dealerships in the car business
Speaker 1: really works. I'm gonna unpack that whole I'm gonna do
Speaker 1: a masterclass unpacking that whole situation so we can get
Speaker 1: you into a home right. And that will include you know,
Speaker 1: a budget you're gonna have for maintenance and anything to
Speaker 1: fix up. Then I want you to to to take
Speaker 1: over time the equity from that house you build up
Speaker 1: and over time, have a plan over five years, ten
Speaker 1: years max right pay patient, buy a home in the
Speaker 1: hood using equity from your home if you can, or
Speaker 1: you have to if you don't have other sources. As
Speaker 1: your home appreciates, and buy a modest home in the
Speaker 1: inner city, rehabit and rent it. Do that twice. Now
Speaker 1: you have three homes, one you're living in and two
Speaker 1: that you've bought as rentals. And you've now created generational
Speaker 1: wealth for a lifetime. So within thirty minutes, we've given
Speaker 1: you a history lesson, we've given you a context lesson.
Speaker 1: We've unpacked the mystery of some finance, the mystery of
Speaker 1: why good things happen sometimes to bad people, and how
Speaker 1: bad things can happen to good people. We've talked about
Speaker 1: the easy ways that you can figure out immediately why
Speaker 1: you should own a home and not why you shouldn't
Speaker 1: rent for any longer than you have to, which is
Speaker 1: appreciation which goes in your pocket, depreciation which helps you
Speaker 1: from a tax perspective, and writing off mortgage payments against
Speaker 1: your income, which means at the end of the year
Speaker 1: you have a good tax pro or even a decent one,
Speaker 1: you'll get a refund a tax refund from some of
Speaker 1: the mortgage proceeds that you put into your own home.
Speaker 1: And is that home compounds and increases in value. Guess
Speaker 1: who benefits you. No, I'm gonna tell you little bit,
Speaker 1: a little bit of private news, just to tell you
Speaker 1: how powerful real estate is. Less than two years ago,
Speaker 1: we bought a home in another country, Turks and Caicos,
Speaker 1: And I'm not going to give you exact numbers, but
Speaker 1: you know respectable value right bought it, and less than
Speaker 1: two years later, the realtor calls me and says, I've
Speaker 1: got an opportunity to sell that house for you. Would
Speaker 1: you like to sell it? Just tell me the number, Well,
Speaker 1: the number was seventy five percent more than what I
Speaker 1: paid for it in eighteen months, less than two years.
Speaker 1: I could have almost doubled value, doubled my value in
Speaker 1: less than two years on a secured real estate investment
Speaker 1: in another country. What business, right legal can you do
Speaker 1: that in now? I didn't buy it for that purpose.
Speaker 1: I didn't buy it for that reason. I bought it
Speaker 1: because it was a nice place for me and my
Speaker 1: family to get away to. Right, and the way I
Speaker 1: structured it, it pays for itself. That's a whole other
Speaker 1: conversation I may get into by the way. You can
Speaker 1: put comments of what topics you want me to cover,
Speaker 1: by the way, But this example is like when when
Speaker 1: when right it pays for itself and it went up
Speaker 1: in value when I was in sleeping It made me
Speaker 1: look like a genius. My net worth went up and
Speaker 1: I didn't do anything but own it because there's just
Speaker 1: not enough properties like the one I bought in the area,
Speaker 1: and other people want the property and there's nothing else
Speaker 1: available for sale, and I'm not selling right out on
Speaker 1: that property as long as I as long as I can,
Speaker 1: I'd like to buy property and hold on to it.
Speaker 1: Some people need to you know, I this whole buy
Speaker 1: and flip thing that's just not for me. I think
Speaker 1: you should buy properties, cash flow them so they take
Speaker 1: care of themselves and hold on to them because they
Speaker 1: will go up at value if you have to sell.
Speaker 1: If there's some strategic reason is selling like the ten
Speaker 1: thirty one tax FI exchange I did that I told
Speaker 1: to you about early in this podcast, then fine. But
Speaker 1: in general, you want to accumulate wealth. And again, forty
Speaker 1: one to forty three percent of black folks own a
Speaker 1: home today compared to seventy five percent of our white counterparts.
Speaker 1: There's all kind of obstacles in your way, you know,
Speaker 1: in generations before us, but those obstacles don't exist today.
Speaker 1: You can do this. Half of black folks not poor people.
Speaker 1: Half of black folks today have a credit score below
Speaker 1: six to twenty half. That means when you wake up
Speaker 1: in the morning, you're locked out of the free enterprise system.
Speaker 1: Operation Hope can help you. Download the Hope in hand
Speaker 1: app or go to Operation Hope dot org. Are called
Speaker 1: eighty eight eight three eight eight Hope and get a
Speaker 1: Hope financial coach and they will help you raise your
Speaker 1: credit score on average fifty four points in six months
Speaker 1: over one hundred points in you know, less than twenty
Speaker 1: four months. They'll help you get your debt down on
Speaker 1: average thirty eight hundred dollars for somebody making two thousand
Speaker 1: dollars a year, and your savings up more than two
Speaker 1: thousand dollars that same person, and we can get you
Speaker 1: bank qualified right, get you in the game so that
Speaker 1: you can become a homeowner, or through one million black
Speaker 1: business issues you know one MBB, become a small business owner,
Speaker 1: or whatever it is you want to do. Live your dreams.
Speaker 1: Will give you optionality in life. Freedom is self determination,
Speaker 1: but you cannot self determine yourself unless you understand the
Speaker 1: rules of the game and understand that financial literacy is
Speaker 1: a civil rights issue of this generation. If you don't
Speaker 1: know better, you cannot do better. You can go to
Speaker 1: church every Sunday, be the nicest person in the world,
Speaker 1: but if you don't understand what we've been talking about here,
Speaker 1: you can win in this game, and we're going to
Speaker 1: help you master it step by step and real talk.
Speaker 1: I'm not going to use twenty words when two will do.
Speaker 1: I'm the latest stuff this thing out for you. I'm
Speaker 1: gonna use my life as a personal testimony. I'm going
Speaker 1: to take questions and answer questions and talk about what's
Speaker 1: going on in the moment, but also talk about things
Speaker 1: that I call it are evergreen, that just is stuff
Speaker 1: that will help you for the rest of your life.
Speaker 1: This is a radical movement of common sense.
Speaker 2: Right.
Speaker 1: Is nothing I've said here today that can be reasonably debated.
Speaker 1: I mean, this is just basic, basic stuff. It's just
Speaker 1: that people have kept the knowledge from you and me,
Speaker 1: and then people say, oh, well, you know people destroyed
Speaker 1: black wealth in the two thousand and eight two thousand
Speaker 1: and nine, Well, black of wealth was destroyed in part
Speaker 1: because we bought a home like you, I don't know
Speaker 1: what you want to buy. I mean, I don't buy
Speaker 1: even a car. I don't buy anything this way. But
Speaker 1: sometimes we asked the wrong question, like what's the payment
Speaker 1: when there's an interest rate attached? We asked on a
Speaker 1: six figure property one thousand, three hundred thousand, four hundred
Speaker 1: thousand dollars, what's the payment on that going to be?
Speaker 1: Without understanding that people were giving you these crappy loans,
Speaker 1: these perfect eye side loans. Twenty points twenty percent. Injury
Speaker 1: is twenty twenty loans. When you got the loan, you
Speaker 1: went blind. Twenty points is like twenty cents on a
Speaker 1: dollar in a fee going to the mortgage broker typically
Speaker 1: and twenty percent interest or just you know what's called
Speaker 1: a negative mamoryization loan, which means every yeah, your payment's low,
Speaker 1: but every time you make a payment, you owe more
Speaker 1: on the loan than next month. I'm sorry, look, yeah,
Speaker 1: you owe more money on the loan balance the next month.
Speaker 1: So basically it's negative amorization. It's going up in debt
Speaker 1: even though your payment is what you want. There was
Speaker 1: adjustable rate mortgage. You really don't want an adjustable rate
Speaker 1: mortgage if you can avoid it at all on a
Speaker 1: thirty year home, because as rates go up, your payment
Speaker 1: can explode. Imagine if you had an adjustble rate mortgage
Speaker 1: in the current environment in twenty three, twenty twenty three,
Speaker 1: going into twenty twenty four, your payment might have doubled
Speaker 1: or tripled. You want to fix rate mortgage. We do
Speaker 1: that by getting you good credit so that you can
Speaker 1: negotiate from a place of strength. There's a lot of
Speaker 1: tricks in this game, and I know most of them.
Speaker 1: If I don't know my team does, and we're going
Speaker 1: to teach them to you so that you can master
Speaker 1: this game at scale in your life and become the
Speaker 1: leader of your life. I didn't cover everything, but hopefully
Speaker 1: I covered enough to moisten your taste for aspirational success
Speaker 1: and silver rights from civil rights in the streets to
Speaker 1: silver rights in the suites at scale. Okay, go to
Speaker 1: Operation Hope today. Take back your life and map out
Speaker 1: how you're going to become a homeowner so you can
Speaker 1: send your kids to college, start a business with the equity,
Speaker 1: buy other homes with equity, go on vacations, plying your retirement,
Speaker 1: whatever you want to do.
Speaker 2: It's possible.
Speaker 1: Is my mother did to live in dignity, you know,
Speaker 1: mental years of your life because you understood that when
Speaker 1: you work, you're just living for the day, like you're
Speaker 1: literally just making money for the day. But you build
Speaker 1: wealth in your sleep in One of the ways, one
Speaker 1: of the easiest ways to do that that most is
Speaker 1: available to most people is home ownership. Small businesses not
Speaker 1: for most people, but homeownership, I believe is. And anybody
Speaker 1: telling you who's successful that you shouldn't own a home,
Speaker 1: I don't know why they're telling you that other than
Speaker 1: they want more for themselves, they're just being provocative because
Speaker 1: they own a home nine times out of ten. I
Speaker 1: mean this just it's just crazy, bringing real empowerment right
Speaker 1: to your front doorstep in this case, right to your microphone,
Speaker 1: to your headphone, to your video reception on your mobile device,
Speaker 1: or whatever you happen to be watching or listening to.
Speaker 1: For this podcast, we have empowerment right from the streets
Speaker 1: to the suites and back. We've got a fan question
Speaker 1: we're going to answer it today. Her name is Sasha.
Speaker 1: This question comes from Sasha King Skid and she's on Instagram.
Speaker 1: She asks what's the best way to start investing in
Speaker 1: real estate? It's a good question, and my answer is
Speaker 1: keep it simple, like keep it simple and keep it modest.
Speaker 1: Don't be dramatic. But this is no time to get fancy, right.
Speaker 1: I want you to ask a whole lot of questions.
Speaker 1: I asked Quincy Jones once. Man, how'd you get so smart?
Speaker 1: He said, John, I'm just nosy as hell. I want
Speaker 1: to know everything about everything. Well that's how I want
Speaker 1: you to be about real estate. I want you to
Speaker 1: know everything about everything. Ambassador Andrew Young, my mentor, my hero,
Speaker 1: my man, the right arm to Doctor MARTINTHA King Jr.
Speaker 1: One of the central leaders of the civil rights movement,
Speaker 1: says that men and women fail for three reasons arrogance, pride,
Speaker 1: and greed. Hello, I don't want you pride for I
Speaker 1: want you arrogant.
Speaker 2: I certa.
Speaker 1: I don't want you greedy because you'll over you'll get
Speaker 1: ahead of your ski, should start doing crazy stuff. And
Speaker 1: I'll get to that in a minute. Maybe I want
Speaker 1: to keep this simple and answer question first, but I
Speaker 1: want you to just be humble, right, ask a whole
Speaker 1: bunch of questions. Go to Operation Hope, talk to one
Speaker 1: of my whole financial coaches. Just ask a whole bunch
Speaker 1: of you know, there's no silly question, there's no stupid
Speaker 1: question because no one taught you this stuff. No one
Speaker 1: gives you a lesson in financial literacy or how capitalism
Speaker 1: and free enterprise works. It's what you don't know that
Speaker 1: you don't know that's killing you. Think you though, Here's
Speaker 1: what I want you to not do. I don't want
Speaker 1: you to have to listen to anybody who's trying to
Speaker 1: separate you from your wallet. Don't invest if you want
Speaker 1: to call it that in fractional real estate. That's not
Speaker 1: the way to start. Don't invest in one of these things.
Speaker 1: I mean, I did these time shares. I'm not hating
Speaker 1: on time shares, actually I am.
Speaker 2: I own one.
Speaker 1: I've been trying to get rid of this thing for
Speaker 1: you know, probably ten years. I've owned it for twenty
Speaker 1: five years. It's just drained me. Basically, I've rented. I've rented,
Speaker 1: you know, a piece of somebody else's what I own,
Speaker 1: a piece of the real estate. But because I don't
Speaker 1: own the whole real estate, I don't owe it fee.
Speaker 1: Simple as that we call it. I own a fraction
Speaker 1: of it that I yes, I can feel pride that
Speaker 1: I have a piece of real estate and it's a
Speaker 1: good location. It's in Newport Beach along the ocean. But
Speaker 1: I have to I can't just go sell it. I
Speaker 1: got to negotiate with in alignment with all the other
Speaker 1: fractional owners and the master controller of that which is
Speaker 1: a but I won't name, And I got to pay.
Speaker 1: If I don't pay the maintenance fee every year, you know,
Speaker 1: they can take the property from me. It just gets ridiculous.
Speaker 1: So you don't have to like do something complicated like
Speaker 1: that you don't even need to go buy a big home.
Speaker 1: You can buy a condo, a townhouse, start modestly, right,
Speaker 1: you can buy There was a when I got the
Speaker 1: Atlanta you could buy a rundown piece of property for five, ten,
Speaker 1: fifteen thousand dollars. There are small towns maybe where you
Speaker 1: live you want to drive, buy something you know close
Speaker 1: to where you can get to Trend. You know, drive
Speaker 1: back and forth there every day if you need to.
Speaker 1: So you don't want to do something more than a
Speaker 1: couple hours from where you are. I'd see more than
Speaker 1: an hour from where you are, and somebody who can
Speaker 1: maybe help oversee the property with you if you're you know,
Speaker 1: doing this with somebody else, doing it with a partner
Speaker 1: or family or whatever. Right, but you want to do
Speaker 1: it modest you want to keep it simple. Clearly, buying
Speaker 1: your own home is smart. But if you do that,
Speaker 1: start there's nothing wrong with the starter home. Don't go
Speaker 1: trying to buy a mini mansion if you you know,
Speaker 1: work for the postal service. Look, my mother worked at
Speaker 1: Madondola's Aircraft and she when she got laid off there,
Speaker 1: she was she was a janitor part time at my school.
Speaker 1: I'm not hating on any kind of job occupation. She
Speaker 1: was a security guard. I'm saying, if you are a
Speaker 1: security guard, if you're a janitor, if you're a postal worker,
Speaker 1: if you you know whatever, some you know, cool, really
Speaker 1: important but modest employment situation. Don't go trying to buy
Speaker 1: a half million, seven and fifty thousand dollars a million
Speaker 1: dollar property. That's crazy, right, and don't listen to anybody
Speaker 1: trying to sell it to you.
Speaker 2: Right.
Speaker 1: You want to buy something that doesn't stress you out,
Speaker 1: that you can handle.
Speaker 2: Right.
Speaker 1: Basically, you want to buy something that would equate to
Speaker 1: what you pay for rent on a monthly basis, and
Speaker 1: you want to have, you know, have you know, save
Speaker 1: up and have a little reserve on the side. Now,
Speaker 1: maybe you don't have a big down payment, that's okay.
Speaker 1: Go to my coaches. If you never heard of the
Speaker 1: earned income Tax Credit and you make less than sixty
Speaker 1: thousand dollars a year, congratulations, I've also just told you
Speaker 1: that you've got some money coming to you.
Speaker 2: That's right, e t C.
Speaker 1: If you make less than sixty thousand dollars a year,
Speaker 1: and if you have three children that check this out,
Speaker 1: you make thirty five thousand dollars a year. You've got
Speaker 1: three kids, the government owes you six thousand. I think
Speaker 1: that's a number, about six thousand dollars sixty five hundred
Speaker 1: dollars in a cash tax refund. If you never heard
Speaker 1: of e t C is retroactive for three years. Okay,
Speaker 1: that's now helped me with a math. That's eighteen thousand,
Speaker 1: almost twenty thousand dollars. There's your down payment for your home.
Speaker 1: You buy your first starter home, you want to buy
Speaker 1: well if you need ten percent or five percent down payment.
Speaker 1: Now you have a down payment, plus you have a
Speaker 1: reserve for maintenance and anything that goes bumping the night,
Speaker 1: up keep for the house, whatever. Right, if you want
Speaker 1: to have a little count set up set aside for
Speaker 1: you know, a pipe urset or whatever you know, and
Speaker 1: my team can also like help you put you know,
Speaker 1: a proper budget in place and get your credit score
Speaker 1: up so you get you know, a great mortgage. So
Speaker 1: you want to get pre qualified with a lender, and
Speaker 1: you want to make sure there's not a hard money lender.
Speaker 2: Not Booboo and Pooky and them.
Speaker 1: You want to you want to get a proper you know,
Speaker 1: this is a do I get married you get married
Speaker 1: to this property, it's gonna be a thirty year mortgage commitment,
Speaker 1: and you want to make sure it's a good mortgage, right.
Speaker 1: You want to be cool with it as it's cool
Speaker 1: with you, and you want to fix rate in my opinion,
Speaker 1: and if you have a seven hundred credit score or better,
Speaker 1: you're going to get a good rate and you're going
Speaker 1: to lock that in through my people or whoever you
Speaker 1: work with.
Speaker 2: My people will for free, right.
Speaker 1: And then you take that commitment that you maybe get
Speaker 1: approved one hundred fifty thousand dollars, two undred ffty thousand dollars,
Speaker 1: three into thousand dollars whatever you know, forty thousand dollars
Speaker 1: you get approved for. I don't think your starter house
Speaker 1: should be any more than that. Hello, and starter house
Speaker 1: or first piece of real estate is an investment property.
Speaker 1: And then go, you know, with confidence, get a broker
Speaker 1: to represent you. They know more about you, know the
Speaker 1: area and all that than you do, and take your
Speaker 1: time and wait for something to inspire you. Again, you
Speaker 1: got to decide whether you want to invest in your
Speaker 1: own starter home yourself, or whether you want to invest
Speaker 1: in an investment property like a raggedy home in the
Speaker 1: hood that you buy, you rehab and you rent, or
Speaker 1: you know, maybe it's a duplex, or maybe it's a triplex,
Speaker 1: or you know, I wouldn't suggest a multifamily as your
Speaker 1: first investment. So keep it simple and be humble, and
Speaker 1: ask a lot of questions and take your time. There's
Speaker 1: always a chance to do it again. But it's very
Speaker 1: easy to get married, very hard to get divorced. And
Speaker 1: the same thing applies to real estate. Very easy to
Speaker 1: get into something bad and very hard to get out
Speaker 1: of it once you're already committed to it. So again,
Speaker 1: keep it simple, keep it humble, keep it modest, and
Speaker 1: keep it moving. And thank you very much to this
Speaker 1: wonderful question from Sasha. I looked forward to seeing you
Speaker 1: the finish line. Sasha, you know, with questions like this,
Speaker 1: no doubt you're going to be successful. All right, Love
Speaker 1: and Light, I'm out, John O'Brien, let me know what
Speaker 1: you think.
Speaker 3: Piece and Light, I love you, by the way.
Speaker 1: Money and Wealth with John O'Brien is a production of
Speaker 1: the Black Effect Podcast Network. For more podcasts from the
Speaker 1: Black Effect Podcast Network, visit the iHeartRadio app, Apple Podcasts,
Speaker 1: or wherever you listen to your favorite shows,