Speaker 1: Hey, ba fam, we are five years into making this
Speaker 1: podcast that we love so much called Brown Ambition, and
Speaker 1: we could not do it without you. We've gone from
Speaker 1: me and Tiffany sneaking around my old office building trying
Speaker 1: to find places to record, and thanks to you, guys,
Speaker 1: we now have one hundred thousand downloads per month for
Speaker 1: this little show called Brown Ambition. We would love to
Speaker 1: ask y'all for a small favor as fans of the show. Tiffany,
Speaker 1: what are we looking for?
Speaker 2: Here's what we'd love from you, guys. We already have
Speaker 2: over a thousand reviews and a five star rating on iTunes,
Speaker 2: but you know it's better than one thousand reviews two
Speaker 2: thousand reviews. If you get head on over to iTunes,
Speaker 2: go to our Brown Ambition page, scroll on down to
Speaker 2: the bottom, subscribe and leave us a five star rating
Speaker 2: and review. So subscribe, rate review. Not too much to ask, right, easypas.
Speaker 2: We love you guys, and thank you so much for
Speaker 2: making Brown Ambition what it is. The last five years
Speaker 2: have been amazing and it's all things to you. Hey, hey, hey, yay,
Speaker 2: yay yay, Okay, I don't know so, Mandra, you took
Speaker 2: us on a journey there. That's what we call a
Speaker 2: run in singer talk. You might not know that because
Speaker 2: you know, was.
Speaker 1: That what that was? All right? It sounded like you
Speaker 1: tripped a company. Oh man, it's too early in the
Speaker 1: show for the shade. I'm sorry.
Speaker 2: Yeah, no, no, it's okay. I like shade. You know,
Speaker 2: a little light shade is fun.
Speaker 1: Little friendly shade, friendly shade. Speaking of shade, I'm trying
Speaker 1: to find a segue to talk about the thing that
Speaker 1: everyone's talking about today. Did you read about Trump's texts?
Speaker 2: Girls?
Speaker 1: Oh lord, I mean, surprise is not the emotion I have,
Speaker 1: no because we all knew this man did not did
Speaker 1: everything he could to get out of paying chexes. My
Speaker 1: emotions are where are you at? Where are you at?
Speaker 1: I've heard from friends who are like, whatever, nothing's going
Speaker 1: to touch this man, Like they're just like so done.
Speaker 1: And I've heard from other friends who are super outraged,
Speaker 1: like where are you at?
Speaker 2: Honestly, I was actually surprised he was as high as
Speaker 2: seven hundred and fifty dollars. I just assumed it was nothing.
Speaker 2: I was like, he cats seven hundred and fifty dollars woo,
Speaker 2: So that was I was disgusted and I don't think
Speaker 2: he's untouchable. And I think even he knows that there
Speaker 2: are things that he said. Thus, Farlow, I don't know
Speaker 2: if you've seen in some of the articles that said
Speaker 2: that he has basically intimated that he will not seed
Speaker 2: power peacefully. So that's one is troublesome. But then also
Speaker 2: it means to me that he thinks that there's a
Speaker 2: very strong likelihood that he's not going to win. It's
Speaker 2: just so much stacked against him. So of course folks
Speaker 2: who are hardcore Trump followers, they're not going to care,
Speaker 2: you know.
Speaker 3: But there are.
Speaker 2: People who voted because they said, well, how bad could
Speaker 2: it be? Those people are like, yikes, this is how
Speaker 2: bad it could be. So I think those people are
Speaker 2: the ones that I might come on over to the
Speaker 2: other side, not because they love the other side, but
Speaker 2: because they're like, wow, this is actually way worse than
Speaker 2: I ever anticipated.
Speaker 1: I just again, and it's like you said, and I've
Speaker 1: got family and Georgia who are pro Trump, and you
Speaker 1: can't tell them nothing. And we've tried, and you know,
Speaker 1: and I think it's worth trying, even if you're not
Speaker 1: going to get anywhere, just so that you have some
Speaker 1: other voice in their heads. But when it comes to
Speaker 1: his base, and you think about who his base is
Speaker 1: and how he really appealed to working class white voters.
Speaker 1: And then of course you have the people who voted
Speaker 1: for him because they're wealthy or business owners and they
Speaker 1: knew that a Trump presidency would lower their taxes, which
Speaker 1: it did. But if you look at his you know,
Speaker 1: base of working class white Americans, like, I'm pretty damn
Speaker 1: sure they've paid their taxes, right, and I just it
Speaker 1: boggles my mind that they can support someone who so
Speaker 1: clearly does not. It's just so it's hypocrisy, you know.
Speaker 1: He he doesn't not stand for, you know, lowering the
Speaker 1: tax burden for low income people, for middle class people.
Speaker 1: He is all about how can the rich stay rich
Speaker 1: and the wealthy get wealthier. That is what his actions say,
Speaker 1: even though you know his words speak differently and personally
Speaker 1: as someone who lives not far so he has this
Speaker 1: The part of the New York Times story that got
Speaker 1: me was he has this massive compound, you know, just
Speaker 1: jillions of acres somewhere in Westchester County. I don't live
Speaker 1: too far from there, but I mean, like worlds away
Speaker 1: from the size of his compound, and he has gotten
Speaker 1: out of paying any property taxes on this mega estate. Meanwhile,
Speaker 1: his own tax law, which put into was put into
Speaker 1: effect a few years ago. His own tax law made
Speaker 1: it basically impossible for us to deduct any of our
Speaker 1: property taxes. So I'm like, I'm trying to be a
Speaker 1: homeowner out here. Our property taxes are really expensive. I
Speaker 1: mean for me, like the double digits, you know, and
Speaker 1: not double digits, but like what do you call it,
Speaker 1: how you figures? You know, double digit thousands of Ye, yes,
Speaker 1: it is painful. And I'm like, this is just that
Speaker 1: that makes my blood boil because someone like that who
Speaker 1: has the resources. And by the way, property taxes, the
Speaker 1: reason we we we grin and bear it and pay
Speaker 1: them is we say things like, well, okay, this goes
Speaker 1: toward paying our teachers and paying for you know, public services,
Speaker 1: and uh, you know, all kinds of services that help
Speaker 1: our community, and that's our contribution. This this, this story
Speaker 1: pretty much proved that this man has not done anything
Speaker 1: for anybody but himself and his children and his family
Speaker 1: and his his brand in the last couple of decades.
Speaker 1: And I think, like, I think you're right. It really
Speaker 1: affirms what we thought if you were anti Trump. But
Speaker 1: I don't know if it'll be enough to sway anyone
Speaker 1: you know, who was always pro Trump. The one thing
Speaker 1: that like the other silver lining of this is I
Speaker 1: feel like, so I have an uncle who's who owns
Speaker 1: some real estate, real estate investment firm in Georgia, in
Speaker 1: the Georgia area, in the Georgia area, in Georgia, in
Speaker 1: the state of Georgia. And you know, I've heard through
Speaker 1: my cousin that one of the reasons he's pro Trump
Speaker 1: is Trump's story of being, you know, pull yourself up
Speaker 1: by your bootstraps, self made billionaire. This is the brand
Speaker 1: that people, you know, that people understand as Trump, like
Speaker 1: he really made his fortune himself, blah blah blah. This
Speaker 1: article like, if you read it, he's a bad businessman. Yes,
Speaker 1: his businesses lose money. He's got some real, real good accountants,
Speaker 1: though they deserve some sort of prize, like if there
Speaker 1: is an Oscar for accounting. I mean, these people are
Speaker 1: like Olympic gold medal winning accountants because they've made this
Speaker 1: man stay afloat all this time. But that persona of
Speaker 1: I'm a very rich, I'm a very smart, I'm a
Speaker 1: very wealthy man with the biggest brain. Like that is
Speaker 1: really like the curtain has been pulled back.
Speaker 2: They say in the New York City, like a real
Speaker 2: estate like circles, like the high level circles.
Speaker 3: Was it?
Speaker 2: Bloomberg was like, uh, we all giggle at him. We
Speaker 2: like you know what I mean, Like, you know, it's
Speaker 2: almost like you know, you you go to college and
Speaker 2: someone pretends like, oh, yeah, when I was in high school,
Speaker 2: I was totally the coolest. I was totally like all
Speaker 2: the girls love me or whatever, and then you go
Speaker 2: back to your college and find out like, oh, you're
Speaker 2: a loser there too. Interesting. So yeah, he he's not
Speaker 2: fooling anyone who's close enough to really see. He's a Picasso,
Speaker 2: you know, from Afar looks like maybe something upfront you're like,
Speaker 2: oh the mess. But what's perfect now is that I
Speaker 2: was like, what did I get this one?
Speaker 3: Yes?
Speaker 1: Silverstone, Yes that was.
Speaker 2: Okay. So but yeah, I just think that it's just
Speaker 2: I'm not gonna lie every day. I'm like, okay, let's
Speaker 2: see now what now? What now? And now? So but yeah,
Speaker 2: I wasn't. I was actually surprised that he paid anything
Speaker 2: at all. And I'm glad that the New York Times
Speaker 2: did this at this moment in time. And then, you know,
Speaker 2: like you said, for some people, they can he can
Speaker 2: literally and Trump has said this himself. He can literally
Speaker 2: kill someone on national television and his biggest supporters would
Speaker 2: be like, well, what did that person do? So yeah, yeah,
Speaker 2: if they need not for them, this is for the
Speaker 2: people who were on the boarderline.
Speaker 1: Yeah, I mean the debate with By the time you
Speaker 1: guys hear this show, the debate, the first presidential debate
Speaker 1: will have been over. You know, I hope Biden takes
Speaker 1: this the ammunition and uses it. Well, for me, it's
Speaker 1: it's just the it's the hypocrisy. And it's like we
Speaker 1: were talking about last week on the show. You know,
Speaker 1: we get questions from people, so you know, how can
Speaker 1: I I hear about people not paying income taxes? Like
Speaker 1: how can I you know, what are some strategies I
Speaker 1: can use? And I'm like, oh, you need to be
Speaker 1: really freaking wealthy, that the wealthy have the most access
Speaker 1: to these tax breaks, because that is who the tax
Speaker 1: code was written for. And although we like to, you know,
Speaker 1: talk about Trump, he's he's following the playbook that Congress
Speaker 1: has made possible. So it's just another reminder that you
Speaker 1: can't just focus on the presidential election. You've got to
Speaker 1: focus about focus on your elected officials, the people who
Speaker 1: are writing the laws and writing legislation. Yes, it was
Speaker 1: Trump's tax plan a few years ago, but Congress passed it,
Speaker 1: and you have to We're the people who put those
Speaker 1: people in the seats that they have where they can
Speaker 1: vote on these things. So you've really got to take
Speaker 1: that into consideration and please vote. Do we say that already.
Speaker 2: Vote right, vote be ot e e.
Speaker 1: But speaking of real estate, that kind of has to
Speaker 1: do with today's show a little bit. We talk about well, honestly,
Speaker 1: we don't talk about this too too much. You guys
Speaker 1: know about our personal stories becoming homeowners and Tiffany's path
Speaker 1: to you know, starting her real estate empire, which I'm
Speaker 1: sure is to come. We get a lot of questions
Speaker 1: actually from people who were like, you know, I'm interested
Speaker 1: in investing in real estate and want an income property.
Speaker 1: How do you? How do you start? And we're really
Speaker 1: excited because today we have a returning guest, Lynette Califoni Cox,
Speaker 1: the money coach herself. What do we call her?
Speaker 2: Our fairy, our fairy financial godmother.
Speaker 1: Yeah, yes, our money auntie. She is joining us today
Speaker 1: because Lynette has been quietly building a real estate empire
Speaker 1: of her own just across the country. It feels like
Speaker 1: her and her husband, Earl have been purchasing income property
Speaker 1: after income property, and I would like to know her secret.
Speaker 1: I would like to know how she's doing it, why
Speaker 1: she's doing it, you know what their thought process is
Speaker 1: behind it, and you know how she's doing especially in
Speaker 1: this economy as she's building up her portfolio of homes.
Speaker 1: So Lynette is joining us on Today show.
Speaker 2: I'm excited because you know, I'm starting to get my
Speaker 2: little baby to owned real estate. So I can't wait
Speaker 2: to see what our very financial godmother has to say.
Speaker 1: Yeah, I've been listening to a watching a lot of
Speaker 1: YouTube on real estate investing, and we have this house
Speaker 1: across the street that's pretty much been abandoned, just like
Speaker 1: in a pre foreclosure situation. I don't know, We're like,
Speaker 1: let's get that house. We can do that, we can
Speaker 1: do this, like, yeah, let's get a fix her upper.
Speaker 1: It sounds easy on paper, So I really want to
Speaker 1: know what Lynett's strategy has Benam decited to talk to her.
Speaker 1: All right, well, should we take a quick break or
Speaker 1: is there anything else you wanted to cover before he Let's.
Speaker 2: Talk on and we're back and blacker than ever. No,
Speaker 2: I'm just joking. We are blacker than ever because we
Speaker 2: have one of my favorite financial folks. She is our
Speaker 2: financial fair godmother. As we mentioned earlier, Linette Califani Cox.
Speaker 3: You Stan, Yeah, we do.
Speaker 1: Stand for the money Coach. Thank you so much for
Speaker 1: being with us. Lynette, No, you guys, I was totally
Speaker 1: looking forward to it.
Speaker 3: I'm happy to be here.
Speaker 1: I think you are a most Guested guest. If there's
Speaker 1: like some sort of trophy we could give the most,
Speaker 1: like having someone on the show that the much of
Speaker 1: the much? Can I speak words today?
Speaker 3: Most Guested?
Speaker 1: You've been here a.
Speaker 3: Lot, Lynnette, totally cool.
Speaker 4: I feel like, you know, like FNL, like when somebody
Speaker 4: gets the whole SNL, you know, and they asked them
Speaker 4: back again again and I'm like, oh, hey, okay, good,
Speaker 4: I get to come back.
Speaker 1: One of brown ambition. Yeah, That's what I'm trying to say. Well,
Speaker 1: we were talking a little bit before the show, and
Speaker 1: we know, let's just take a who like a deep
Speaker 1: breath because we know the world's on fire literally, fingeratively politically,
Speaker 1: it seems like, but one of the silver linings, like
Speaker 1: you were just saying, is real estate. I mean, at
Speaker 1: a time when everything seems so uncertain, you know, we
Speaker 1: continue to get questions from listeners who were interested and
Speaker 1: you know, how can I start building wealth? And of
Speaker 1: course they're like me, and they read about real estate
Speaker 1: and the importance of owning property and they want to start.
Speaker 1: And you know, it's something that we haven't really touched
Speaker 1: on too much. I think Tiffany said, you, what are
Speaker 1: you dip in your baby toe into retate? Yeah, investing
Speaker 1: the pinky the pinky one, the pinky toe. And I
Speaker 1: have been semi social stocking you, Lynette, and it seems
Speaker 1: like you and Earl, mister Earle have been just acquiring
Speaker 1: property after property, slowly but surely, and building your own
Speaker 1: little real estate empire. And I was like, let's have
Speaker 1: the net on because I would love to hear your
Speaker 1: approach to real estate investing and why you think this
Speaker 1: actually could be a good time if people are considering
Speaker 1: getting real estate right.
Speaker 4: Well, we have been slowly but surely building since twenty sixteen,
Speaker 4: and it just got accelerated a lot in the last year.
Speaker 4: So we currently have eight properties. Are own house that
Speaker 4: we live in, which is in the suburbs of Houston.
Speaker 4: We're in the kind of the northwest section of Houston,
Speaker 4: and then seven rental properties. So I don't know where
Speaker 4: do you want to start, like how it first began
Speaker 4: or what our approach?
Speaker 1: Yes, what was your approach from the beginning? Was it
Speaker 1: eight always in your mind? Like or were you like,
Speaker 1: let's start with one and then accidentally you had eight?
Speaker 1: How does that happen?
Speaker 3: No?
Speaker 4: I definitely did not have this in mind, but when
Speaker 4: the journey sort of began.
Speaker 3: I was like, oh, okay, yeah, I think.
Speaker 4: I want to have like ten to twelve plus, you know.
Speaker 4: So what happened was really so it's kind of a
Speaker 4: circuitous thing. And I think Mandy, we talked about this
Speaker 4: before when our oldest daughter, Aziza went off to college.
Speaker 4: You know, we were living in New Jersey. She went
Speaker 4: to college in Texas at ut in Austin, and long
Speaker 4: story short, she lost her scholarship her first year and
Speaker 4: she rebounded afterwards and you know, got her aise again
Speaker 4: and was on the dean's list and all that good.
Speaker 3: Stuff, but by.
Speaker 4: Line she didn't have her three point five GPA that
Speaker 4: was required, so she lost her scholarship. So as a
Speaker 4: result of that, we started looking for ways to lower
Speaker 4: her tuition because there was about three times as much
Speaker 4: the tuition, you know, a good thirty something thousand at
Speaker 4: the time per year I don't know, thirty five thirty
Speaker 4: eight something like that as an out of state resident.
Speaker 4: So I was doing some research and I said, oh,
Speaker 4: wait a minute, if you like, if she owns property
Speaker 4: in the state of Texas, then you know, she can
Speaker 4: establish residency and then she'll get in state tuition.
Speaker 3: So we just thought.
Speaker 4: Time to double down on Aziza, you know, And so
Speaker 4: we ended up buying her.
Speaker 3: This first property.
Speaker 4: And we knew that relative to say, the northeast to
Speaker 4: New York New Jersey area, prices were very affordable, very reasonable.
Speaker 4: And so the house it was a it was a condo,
Speaker 4: I should say it is. She still lives there to
Speaker 4: this day. It was a condo that was two hundred
Speaker 4: and ten thousand dollars. We put ten percent down, so
Speaker 4: twenty one thousand dollars down. We had about four thousand
Speaker 4: dollars in closing costs. So we came out of pocket
Speaker 4: about twenty five thousand dollars, which was about the difference
Speaker 4: that we would have been paying in her tuition about
Speaker 4: you know, ten thousand, eleven thousand in state costs versus
Speaker 4: thirty five thirty six ish thirty eight even out of state.
Speaker 4: So I was thinking, like, Okay, I'm going to be
Speaker 4: paying housing, you know, on campus anyway, but if I
Speaker 4: can kind of get her started, I can get in
Speaker 4: state tuition, you know, help establish credit in her name
Speaker 4: as well, put her on there. So we knew that
Speaker 4: the Austin market was actually quite hot and that we
Speaker 4: could very easily get roommates in there to cover the mortgage.
Speaker 4: So that's pretty much exactly what happened. It was a
Speaker 4: two bedroom and in a Ziza's room, which was pretty spacious.
Speaker 4: It was her and one other roommate in the room,
Speaker 4: and then another girl in the second bedroom who had
Speaker 4: the big another bedroom all to herself. And so the
Speaker 4: two roommates paid essentially to cover the mortgage, and it
Speaker 4: was about fourteen hundred dollars, and that's what the two
Speaker 4: you know, two students, her two roommates were paying. So,
Speaker 4: you know, sophomore year, junior year, senior year. That's exactly
Speaker 4: what happened. They're paying the mortgage, knocking down the principal
Speaker 4: balance on there. There's no profit in it for us,
Speaker 4: except of course having in state tuition, having no housing
Speaker 4: costs because housing on campus at UT was about ten
Speaker 4: thousand a year as well, so we definitely got a
Speaker 4: financial benefit from it.
Speaker 1: Brilliant, It's all I'm thinking is, yeah, very brilliant.
Speaker 4: Sorry, so we would so again, we kind of like
Speaker 4: stumbled into this strategy if I'm if I'm again, if
Speaker 4: I'm honest, It wasn't like, oh, let me try to
Speaker 4: do this to start it off.
Speaker 1: So so your first step is have your daughter lose
Speaker 1: her scholarship.
Speaker 3: Yeah, exact, that's funny.
Speaker 1: Sure, okay, but don't freak out become a real estate mogul.
Speaker 3: Got it exactly totally.
Speaker 4: So so now you know what though, you know, first
Speaker 4: of all, I can't even tell you how many students
Speaker 4: that happens to that you know that first year just kind.
Speaker 2: Of like, yes, that was me, girl. They brought me
Speaker 2: all the way home. My parents are like, oh, okay,
Speaker 2: come back home.
Speaker 3: Yeah.
Speaker 4: So and the ZSA she wound up, as it turns out,
Speaker 4: instead of graduating in twenty nineteen. She actually graduated in
Speaker 4: December twenty eighteen, and she graduated one semester early, so
Speaker 4: she did.
Speaker 3: She she bounced back and did you know, like I said,
Speaker 3: very well.
Speaker 4: But it worked out so beautifully because again her roommates stayed.
Speaker 4: And then her last after she graduated, she had an
Speaker 4: internship and she got a job, and she's, you know,
Speaker 4: been doing very well working and she was like, Mom,
Speaker 4: I want to I want to pay rent.
Speaker 3: And I was like, why you want to pay rent?
Speaker 4: I did this so you could get a start, you know,
Speaker 4: I want you She's like, Mom, I've had a start
Speaker 4: for three years. I've had you know, I've had no rent.
Speaker 4: But I have to be financially responsible and blah blah
Speaker 4: blah blah. So she wanted to pay rent, and she
Speaker 4: also wanted to have one of the roommates not renewed
Speaker 4: so she could have fewer girls in there.
Speaker 3: She was like, I went out my own room. So
Speaker 3: I was like, uh huh.
Speaker 4: So, as it turns out, this year, in January of
Speaker 4: twenty twenty, she got married to her college sweetheart. He
Speaker 4: graduates and gets his master's degree in engineering, this in December,
Speaker 4: but they still live in that place. So now before
Speaker 4: the roommates were covering it, but then Aziza and Jacob
Speaker 4: live there now and now since January they've been collectively
Speaker 4: paying their rent, paying the mortgage on it, and paying
Speaker 4: so they cover it as their rent and so again
Speaker 4: break even. It's not like I'm you know, we're not
Speaker 4: trying to make any money off of that in terms
Speaker 4: of profit, although good to say prices have gone up,
Speaker 4: so it has appreciated in value and Austin is quite
Speaker 4: a great market. And what it showed me though was
Speaker 4: when you have a public university which has you know,
Speaker 4: forty thousand plus students, and there's high demand for housing
Speaker 4: and it's a very strong sort of economic base, your
Speaker 4: rental property will wist, never go, you know, vacant. You
Speaker 4: can constantly find tenants. So now fast forward to my son, Jakata.
Speaker 4: He went off to college. He's three grades behind Azeiza,
Speaker 4: so he went also to a public university and still
Speaker 4: he's a junior there in college now in Raleigh, North
Speaker 4: Carolina at n C State North Carolina State University. So
Speaker 4: when Jakada was choosing colleges, he was looking at Loyola
Speaker 4: in California and he was looking at other private schools,
Speaker 4: and I was like, and I said, if something happens
Speaker 4: with your scholarship or anything, I said, I want to
Speaker 4: be able to control that tuition, and that private school tuition.
Speaker 4: It doesn't matter if you're in state or out of
Speaker 4: state resident, it's going to be the same.
Speaker 3: And it was like sixty grand there.
Speaker 4: So I was like, no, no, no, no, no, I said,
Speaker 4: you're going to do n C State And so he's
Speaker 4: super super hahih that he did, and he again did
Speaker 4: not falter at all. You know, Dean's list also and
Speaker 4: it's done very well. But part of what I started
Speaker 4: strategizing was around I told him, I said, listen, we're
Speaker 4: going to put you on the same track. We will
Speaker 4: buy you your first property, and we will help you
Speaker 4: because we've you know, made certain commitments to our kids
Speaker 4: and told them, you know, your job is to be
Speaker 4: a good person and a good student. We'll make sure
Speaker 4: you don't have student loan debt. We'll buy your first property,
Speaker 4: buy your first car, you know, did you know that
Speaker 4: kind of stuff. So he was, you know, totally, you know,
Speaker 4: down for the game plan. So for students at most
Speaker 4: kind of high quality schools, they typically require them to
Speaker 4: live on campus their first year, and so we knew
Speaker 4: that that was the case, and we planned. We said, okay,
Speaker 4: so in the summer, right after your freshman year, we're
Speaker 4: going to buy you a property, and that property will
Speaker 4: help you to establish residency going you know, after your
Speaker 4: sophomore year, because you have to live in the property
Speaker 4: for one year. So last July, we bought Jakata a
Speaker 4: townhouse in Raleigh, and I'll I mean, I don't know
Speaker 4: how much depth you want to go into it, but
Speaker 4: we ended up paying cash for that property. That wasn't
Speaker 4: our intentions, but the bank started messing with us and
Speaker 4: I was like, oh no, Y're not gonna stop me.
Speaker 1: So we now go into that detail because I feel
Speaker 1: like tif, you know you you purchased your property cash, right.
Speaker 2: Mm hmmm hm. So we share that, yeah, so feel.
Speaker 1: Free and also talk about the lending process because you're right,
Speaker 1: you took out a mortgage for the Austin property, so
Speaker 1: in Raleigh, Yeah, what happened?
Speaker 3: Right? So well, okay, so here's the truth.
Speaker 4: So I was working with a local bank, I have
Speaker 4: a I have an amazing real estate agent in Raleigh
Speaker 4: who I love a lot the last you know, several years,
Speaker 4: she's helped us because again, in our sort of portfolio,
Speaker 4: five of our properties are in Raleigh, and this agent
Speaker 4: has worked with us on all of them, and so
Speaker 4: I knew her and trusted her recommendations, et cetera. So
Speaker 4: she said, oh, here, this is a local lender I've
Speaker 4: worked with. Let's start here. So I was like, okay, fine,
Speaker 4: So we submit all of our paperwork, they run our credit,
Speaker 4: they check our assets. They tell us, okay, here, you're
Speaker 4: going to put down a twenty percent down payment.
Speaker 3: I said, not a problem.
Speaker 4: So, because it's obviously considered an investment property with azisas
Speaker 4: because that was the first one we bought outside of
Speaker 4: our property in New Jersey at the time, it was
Speaker 4: really able to be as a from a mortgage standpoint,
Speaker 4: like a second home. They family member lived there, a
Speaker 4: ZISA herself, so it did not have an investment property
Speaker 4: rates attached to it, ignore those same requirements, which are
Speaker 4: typically a higher down payment. So that's why we able
Speaker 4: to put only ten percent down for that first one.
Speaker 4: So but for this one, because we already had the
Speaker 4: Austin property and our mountain side property, not to mention,
Speaker 4: we moved last summer, so we moved from New Jersey
Speaker 4: to Texas.
Speaker 3: So we had our.
Speaker 4: New residence here in the Houston area, which became our
Speaker 4: primary residence. Then we rented out our New Jersey property.
Speaker 4: That's another story. I'll tell you that in a minute.
Speaker 4: But long story short. When we bought Jakata's property in July,
Speaker 4: it was definitely an investment property, there's no getting around it,
Speaker 4: even though he lives there, et cetera. And the bank was,
Speaker 4: you know, they were fine with that. Well, about two
Speaker 4: ten days, two weeks before the scheduled closing, the loan
Speaker 4: officer she told me, she said, you know, how we
Speaker 4: portfolio our own loans, They don't sell them in the
Speaker 4: secondary market, you know, off and so she said, our
Speaker 4: underwriters would feel a little more comfortable if, you you know,
Speaker 4: if you put down twenty five percent instead of twenty percent.
Speaker 4: And I was like okay, And I was like why,
Speaker 4: And then she was like what, Just it just makes
Speaker 4: them feel you know, they just you know, more skin
Speaker 4: in the game. It's just more comfort and just in
Speaker 4: terms of risk tolerance and blah blah blah blah. And
Speaker 4: I was like okay. I was like, okay, we'll put
Speaker 4: down twenty five percent, you know. So then the week
Speaker 4: of closing, on a Monday, we were going to close
Speaker 4: on Friday, the same person calls me and says, you know,
Speaker 4: the underwriters they'll feel a lot more comfortable if you
Speaker 4: put down thirty percent instead of twenty five.
Speaker 3: And I was like, well, well, well, I was like why.
Speaker 4: And so then she said, well, it's just that, you know,
Speaker 4: a different appetite for risk in the marketplace, and they
Speaker 4: want to have a high degree. I said, look, you
Speaker 4: see how much cash I have. You see what my
Speaker 4: credit score is. You see that I have, you know,
Speaker 4: perfect credit, plenty of ASCID. There's no you know, there's
Speaker 4: no you're not taking any risk here. And I said,
Speaker 4: and you're asking me for something. I said, if you're
Speaker 4: asking for this, I'm sure that means that my interest
Speaker 4: rate is going to go down commensurate to this extra
Speaker 4: down payment that I'm making to offset quote unquote the
Speaker 4: risk that the bank is taken, right. And then she
Speaker 4: was like, no, it would be the same interest rate
Speaker 4: and I was like, uh no, it won't be so
Speaker 4: so she said, well, you know, it just has to
Speaker 4: be this It has to be this way, and I
Speaker 4: was like, no, actually it doesn't. And she was like,
Speaker 4: excuse me, and I said, listen, I tell you what
Speaker 4: I said. I don't know what you're doing on Friday,
Speaker 4: but I can tell you what I'm doing on Friday.
Speaker 4: I am closing on this property and I will be
Speaker 4: closing with or without you. And I just left it
Speaker 4: just like that, and she was like she was like stammering.
Speaker 4: I'm sure she was shocked and probably nobody had told
Speaker 4: her that before, but.
Speaker 3: I said, absolutely not.
Speaker 4: And I don't know what the you know, sort of
Speaker 4: trigger issue was, but you know, Earl and I were
Speaker 4: kind of looking at each other like are they messing?
Speaker 3: What else are they?
Speaker 4: You know, like is this something you know you kind
Speaker 4: of hear about crazy stories or what's going on here?
Speaker 4: So that situation continued and she was like, yeah, I
Speaker 4: talked to the underwriting and I was like, you don't
Speaker 4: have to talk to an underwriter.
Speaker 3: Don't have to talk to me. I told you what
Speaker 3: I'm doing. You can come along for the ride or not.
Speaker 4: You can get these you know, this point in these
Speaker 4: fees that you were going to charge me or not,
Speaker 4: or I can just close without you. So I just
Speaker 4: was like, you know, as my good friend Laterce would say, deuces, you.
Speaker 1: Know, so you paid that property?
Speaker 4: Okay, yeah, So I was like, you know, and then
Speaker 4: I was another reason, of course, because I was looking
Speaker 4: at the timeline, and I knew that by August that
Speaker 4: I wanted Jakata to have the house and I wanted
Speaker 4: him to have one year residency because I knew coming
Speaker 4: into this year as a junior, you have to have
Speaker 4: lived in the property for one year, et cetera. So
Speaker 4: and sure enough this year Jakata was declared the in
Speaker 4: state resident and he's going to be staying out there
Speaker 4: in Raleigh. And you know, he worked out there for
Speaker 4: all his taxes, he registered to vote, he did, you know,
Speaker 4: he did everything. And yes he has a property out
Speaker 4: there as well to kind of get him started, but
Speaker 4: it was definitely not our intention. So that property was
Speaker 4: one hundred and fifty eight thousand dollars.
Speaker 3: We paid cash for it.
Speaker 4: And then and again I had no intention of doing that.
Speaker 4: I felt good that we were, you know, strong enough
Speaker 4: in a position to be able to do it, because
Speaker 4: even though there was no crazy situation like with a Ziza,
Speaker 4: it was, you know, let's help her, let's you know,
Speaker 4: deal with a situation to a bit of recovery because
Speaker 4: she had a poor first semester and she was on
Speaker 4: probation and.
Speaker 3: You know, et cetera.
Speaker 4: But I I felt confident knowing you know, the child
Speaker 4: that she was, that she was, you know, a good
Speaker 4: student and a hard worker, et cetera. But think about
Speaker 4: all the people who either the parent doesn't have the
Speaker 4: money to keep them in school if something goes wrong,
Speaker 4: or you know, the wherewithal to make things happen. If
Speaker 4: you know, the system kind of starts messing with you.
Speaker 4: So we did that, and then about six months later,
Speaker 4: we took the equity out of that property. We took
Speaker 4: about seventy five percent of equity out of that property.
Speaker 3: So again I would.
Speaker 4: Have been fine to put a twenty twenty five percent
Speaker 4: down payment upfront. So if you can kind of reverse
Speaker 4: it in your mind, we now know that that's actually
Speaker 4: a very good strategy to acquire properties. See, if I
Speaker 4: had known going in that I was going to buy
Speaker 4: that property for cash, I would have negotiated a much
Speaker 4: better deal.
Speaker 3: I wouldn't have agreed to pay one hundred and fifty
Speaker 3: eight thousand.
Speaker 4: I would have tried to pay you know, one forty
Speaker 4: eight or something, because I would have been able to
Speaker 4: get the deal done fast, just take it out of
Speaker 4: my account and just keep it moving.
Speaker 3: But now I know that.
Speaker 4: It's actually one of the strategies that you can use.
Speaker 4: If you're going to buy cash, you can go in
Speaker 4: more aggressively upfront, and you can get a mortgage on.
Speaker 3: The back end.
Speaker 2: Again, it's if you again, you.
Speaker 4: Just have to kind of reverse in your mind the
Speaker 4: thinking about what the process looks like. People think, I
Speaker 4: put the money upfront ten thirty percent whatever your down
Speaker 4: payment is, then I get.
Speaker 3: A mortgage to fill in the gap.
Speaker 4: Well, no, you could also if you have cash, you
Speaker 4: could buy the property for cash upfront, probably get a
Speaker 4: much better price, and then get a mortgage on the
Speaker 4: back end. And it's effectively the same thing, except that
Speaker 4: you've been able to perhaps beat out other bidders or
Speaker 4: other investors, buy a property for a cheaper price, et cetera,
Speaker 4: and avoid initially certainly a whole bunch of you know,
Speaker 4: closing costs and fees and things of that nature. So
Speaker 4: we both Earl and I have spent a lot of
Speaker 4: time in Raleigh, you know, going back and forth so
Speaker 4: many times with Jakata visiting. I had taken him out
Speaker 4: there several times just before he even made the choice
Speaker 4: to go to NC State, and we.
Speaker 3: Liked Raleigh a lot.
Speaker 4: We saw what was happening in Raleigh and we said,
Speaker 4: this reminds us of Austin. Very strong economy, local market
Speaker 4: fueled a lot by a number of college campuses.
Speaker 3: In this case, n C State is.
Speaker 4: You know, twenty minutes or so from Duke University in
Speaker 4: UNC Chapel Hill. The whole research triangle area is doing
Speaker 4: quite well, and we started looking at property prices and
Speaker 4: we were like, this is pretty affordable here.
Speaker 3: These are really good prices.
Speaker 4: And the rents are nice and strong, and demand is there,
Speaker 4: especially because again near State, there are you know, forty
Speaker 4: thousand plus students who are attending that campus who need
Speaker 4: someplace to live because there's not enough housing on.
Speaker 3: Campus for everybody.
Speaker 4: So so so after that we started looking and we
Speaker 4: got two other ones in the beginning of the year,
Speaker 4: and then two.
Speaker 3: More in this past summer.
Speaker 4: And so those four other rentals were all this year,
Speaker 4: so two right before the pandemic and two in the
Speaker 4: middle of the pandemic, one in July and one in August.
Speaker 1: So all in Raleigh, All in Raleigh.
Speaker 3: I love Raleigh.
Speaker 1: I see that. Well, you also have like the connection
Speaker 1: because I think it may be hard for people to
Speaker 1: imagine buying property in a different state, but I mean,
Speaker 1: you're it's like you had the connection with your kids
Speaker 1: being there and it just happens. Like I also feel
Speaker 1: like the mentality of someone living in Jersey or New
Speaker 1: York at the Tristate area is like, you see these
Speaker 1: prices other places that may make people like may make
Speaker 1: their eyes bug out, but from our perspective, it's like, oh,
Speaker 1: that's real cheap, but I mean.
Speaker 4: It's it's dirt sheep compared to certainly the Northeast, where
Speaker 4: you know, my house in New Jersey.
Speaker 3: Is like six hundred and fifty thousand dollars.
Speaker 4: But here these properties that I'm talking about, the lowest
Speaker 4: one I bought was about eighty thousand dollars. The highest
Speaker 4: one was just under two hundred thousand, so seventy eight
Speaker 4: thousand if you want to be one hundred percent exact.
Speaker 4: And then one ninety one was the last one I bought,
Speaker 4: and we bid over the asking price for that one.
Speaker 4: It was multiple offers on it. And these are four
Speaker 4: four units or four not a four family. These are
Speaker 4: condo units, but they have four single bedrooms, four single bathrooms,
Speaker 4: and they're all student housing.
Speaker 3: The four bedroom units.
Speaker 4: They're literally right by the campus. And so yeah, and
Speaker 4: again and because I know this market very well, because
Speaker 4: first of all, I'm a parent, and I know the
Speaker 4: mindset of a parent.
Speaker 3: You're not gonna let your kid in college. You're not.
Speaker 4: The kid is not gonna you know, we check the parents' credit,
Speaker 4: you know, more than anything else, the parents credit. And
Speaker 4: you know, anytime if the student just stays in school,
Speaker 4: there's no parent that's just going to like let the kid,
Speaker 4: you know, kind of like be out on the street.
Speaker 4: So you know, you do your due diligence in terms
Speaker 4: of you know, checking the job and the credit and
Speaker 4: all that. And some of them are independent, the students
Speaker 4: can be independent, et cetera. So for Jakata's property, for example,
Speaker 4: he has a townhouse that's a two bedroom, three bath.
Speaker 4: It's pretty big, it's about almost fourteen hundred square feet.
Speaker 4: And again the mortgage on that property, I tell you,
Speaker 4: we took some equity out. The mortgage is six hundred
Speaker 4: and nineteen dollars. He has one roommate. The roommate pays
Speaker 4: seven hundred dollars a month go so and then on
Speaker 4: the other two properties the mortgages are also. One of
Speaker 4: them is in the six hundred dollars Raine six forty three,
Speaker 4: another one around eight hundred dollars, and the rental income
Speaker 4: well all in because it has hoa fee as well,
Speaker 4: about one thousand dollars, and the rents are about nineteen
Speaker 4: hundred to two thousand on the on the other two properties.
Speaker 1: So you buy these properties leveraging the equity from that
Speaker 1: initial property. So did you or did you pay cast?
Speaker 3: Not at all?
Speaker 4: No, not at all. I never took any equity out
Speaker 4: of any of these properties. So we paid cash out
Speaker 4: of our own savings and out of our trust account.
Speaker 4: We have a solo for oh one k. So let
Speaker 4: me explain something else to your audience because some of
Speaker 4: them might want to utilize this strategy at some point
Speaker 4: in the future. So, out of the eight properties that
Speaker 4: we have, all of them have mortgages on it, including
Speaker 4: this property that we live in, our own house in
Speaker 4: the Houston area, and the five of the properties, our
Speaker 4: property here in Houston, our property in New Jersey, the
Speaker 4: Raleigh property, which is where our son lives and has
Speaker 4: the tenant there, and the one that we just closed
Speaker 4: on in August, and the property that Aziza lives in
Speaker 4: right now. All of those are just traditional mortgages that
Speaker 4: you know, with a like you go through a bag
Speaker 4: and you get approved through the normal process.
Speaker 3: Check your DTI, check your savings, check your credit, you know,
Speaker 3: you put your down payment, etc.
Speaker 4: Three of the properties that we have in Raleigh, though,
Speaker 4: are what are we're financed by what's called a non
Speaker 4: recourse mortgage, and so a non recourse mortgage is totally different. Basically,
Speaker 4: they're just looking at the property, valuing it and saying
Speaker 4: will it have enough rental income to cover this mortgage
Speaker 4: and have a strong enough debt service coverage ratio? And
Speaker 4: so they like to see one point twenty five times.
Speaker 4: So like if your mortgage, say was one thousand dollars,
Speaker 4: they want to know that the rental income would be
Speaker 4: twelve to fifty a month, and in our case, they're
Speaker 4: you know, far exceed that. So a non recourse mortgage,
Speaker 4: you can use your retirement assets, you can use money
Speaker 4: in a four oh one K for example, which is
Speaker 4: what we did for three of these properties, and the
Speaker 4: down payment requirements are higher. You usually have to put
Speaker 4: down a minimum of thirty percent, but some ask for
Speaker 4: forty or fifty percent, And in our cases we put
Speaker 4: down forty percent on two of them and thirty percent
Speaker 4: on another one.
Speaker 2: Okay, and for taking from your four one k correct? Okay?
Speaker 2: Well what's the So I know you said you want
Speaker 2: to because right now you have eight properties and you
Speaker 2: said ideally you want twelve to fifteen yep, So what's
Speaker 2: the like, what's the end and end goal? Like, what's
Speaker 2: the do you want to sell these like you years
Speaker 2: from now? Okay?
Speaker 3: Not at all, not at all.
Speaker 4: So Earl and I are both super passionate about real estate.
Speaker 4: This is all just passive income streams for us. I
Speaker 4: don't want to sell anything. I want to be like
Speaker 4: how Warren Buffett is about stocks when when you ask
Speaker 4: him like when's the best time to sell, He'll say never.
Speaker 4: You know, I just want to be sitting on these properties.
Speaker 4: It's not that I might not ever sell, like our
Speaker 4: house and mountain Side. You know, we definitely have thought
Speaker 4: about it and we have no need to sell it
Speaker 4: or anything like that. But we thought, okay, well maybe
Speaker 4: we should just keep it for you know, we'll see.
Speaker 4: But long story short, no, passive income streams are what
Speaker 4: we're trying to develop. And you know, I'm not going
Speaker 4: to work as much as I work now forever, and
Speaker 4: so I like the idea of building up, you know,
Speaker 4: multiple streams of income and kind of these residual rental
Speaker 4: streams that you know, we do a lot of work
Speaker 4: upfront to acquire it because I search and I'm really
Speaker 4: rigorous in my screening process. But after that, like we
Speaker 4: have property managers and you know that kind of thing,
Speaker 4: and it's and it works out great.
Speaker 1: That's the piece I would like to talk about a
Speaker 1: little bit is you know, you guys are landlords. Now
Speaker 1: how do you so do you outsource that management? The
Speaker 1: screening of applicants? If you have like four tenants reached rental,
Speaker 1: you know in a college campus area, that's got to
Speaker 1: be a lot of work. So can you talk about
Speaker 1: like the paperwork side of it, the managerial side of it.
Speaker 4: Sure, So we definitely have a property manager, and at
Speaker 4: first we didn't. We really kind of didn't need to.
Speaker 4: So for two of the properties that we that we
Speaker 4: bought in January, the ones that we initially did the
Speaker 4: non recourse lending with and by the way, just in
Speaker 4: case anybody is curious, I have no affiliation or anything
Speaker 4: with these companies, but I'm just telling you because sometimes
Speaker 4: people don't know.
Speaker 3: And I'd like people to just like, like, okay, go
Speaker 3: check them out and see for yourself.
Speaker 4: We use a lender called Peak Peak Asset Management for
Speaker 4: the first two properties, and then for this most recent one,
Speaker 4: we used a lender call First Western Federal Savings Bank.
Speaker 4: Great experiences honestly with both of them, so I you know,
Speaker 4: it was good all the way around. For the first
Speaker 4: two that we do with the non recourse loans in Raleigh,
Speaker 4: they are single units and really we kind of just
Speaker 4: didn't even need. One has a couple living there, and
Speaker 4: another one a couple which and they have a kid,
Speaker 4: and it just you know, they're just responsible. They just
Speaker 4: send a check. It's really it's kind of like not
Speaker 4: much to do. Plus one of them we totally renovated
Speaker 4: after we bought it, so it's you know, it's in good,
Speaker 4: good condition and whatnot. So but for these other ones,
Speaker 4: the student housing, yes, you know, and three of them
Speaker 4: are specifically designed with students in mind. So Jakada's property,
Speaker 4: you know the guy who lives there with him, he's
Speaker 4: a recent college graduate. Again, he's you know, engineering guy.
Speaker 3: He pays.
Speaker 4: There's no issues and really nothing to do. But the
Speaker 4: other properties, yes, we got a property manager. It's Wilson
Speaker 4: because anybody's interested who is known for managing student housing
Speaker 4: in that area. So one of their offices is like
Speaker 4: right there at the unit, and so if the students
Speaker 4: have any issues or any problem, they go to them
Speaker 4: first and they just fix it. They just handle it.
Speaker 4: If there's any bills, then they send it to us.
Speaker 4: They get our approval, et cetera. And it's worth it.
Speaker 4: And in general you're going to pay anywhere from seven
Speaker 4: eight percent maybe nine percent. Our fee, I believe is
Speaker 4: eight percent on the rental management fee side. In terms
Speaker 4: of whatever the income is that they're collecting and what
Speaker 4: they're managing, it's usually about eight percent. You can negotiate,
Speaker 4: et cetera. But the more properties you get, you definitely
Speaker 4: I would encourage people to have a property manager.
Speaker 3: It just makes your life so much easier.
Speaker 1: And we're so I have kind of ope tifty.
Speaker 2: Then I just had a quick like like kind of
Speaker 2: like Jersey specific because so the house in Jersey said,
Speaker 2: it's about seven hundred thousand. You're renting that out? Is
Speaker 2: it hard to find rental school? Because I something my
Speaker 2: parents they live in Westfield, which is right next to
Speaker 2: their mountain side.
Speaker 3: No, it's not at all.
Speaker 4: Okay, Tiffany, let me tell you what happened just very quickly.
Speaker 3: So in Westfield.
Speaker 4: I know it well because, like you said, it's right
Speaker 4: next door to Mountainside, which is where we lived.
Speaker 3: In our area.
Speaker 4: You know, it's the little McMansions and the million dollar
Speaker 4: homes and this and that.
Speaker 3: Our house was not that it was.
Speaker 4: It's a very it's a it's a nice little house,
Speaker 4: but a modest house compared to all the other ones.
Speaker 3: Ranch style home, good, good sized land, about zero point
Speaker 3: four zero point four.
Speaker 4: Five or so acres in terms of the size, pool
Speaker 4: in the back, three bedroom, three bath, completely finished basement,
Speaker 4: but we renovated everything before we left. We did the
Speaker 4: whole kitchen, over the floors, the you know, paint, we
Speaker 4: did blah blah blah. Right, we initially and we had
Speaker 4: a real estate agent to list our property. She said, oh,
Speaker 4: you're going to get a buyer who's like coming from
Speaker 4: another state or from out of the country. Who you
Speaker 4: know you're going to get a certain kind of buyer.
Speaker 4: I was like, fine, as long.
Speaker 3: As they pay our rent, you know.
Speaker 4: So initially we asked and put it on for thirty
Speaker 4: nine hundred a month, three nine hundred dollars per month,
Speaker 4: and she said, no, that's going to be too much.
Speaker 4: That's you know, that's just way too high. I'm going
Speaker 4: to say thirty five hundred a month and blah blah blah,
Speaker 4: and Earl and I were like, nah, we think this
Speaker 4: is we know this area, we know what people want,
Speaker 4: you know. So we got a guy who was a
Speaker 4: former CEO, well actually he is a CEO. He and
Speaker 4: his wife were in Florida. They were business owners. He
Speaker 4: actually came out of retirement to run a food packaging
Speaker 4: type of company in New Jersey. They saw the house,
Speaker 4: they loved it, and he did ask. He was like, oh,
Speaker 4: you know, I want to you know, do a year
Speaker 4: or two years, I don't know what yet. And they
Speaker 4: just recently renewed again, but he said, can we do
Speaker 4: thirty eight hundred instead of thirty nine hundred.
Speaker 3: We were like yeah. We were like yees.
Speaker 4: So, I mean great credit, good tenant. And it's been
Speaker 4: no problems whatsoever. So when we're like, oh, we love
Speaker 4: these people, you know, so you don't know that market,
Speaker 4: especially because you know where we are off of the
Speaker 4: off of Route twenty two, and you know, access to
Speaker 4: New York is great, especially a lot of New Yorkers
Speaker 4: when they come and they see what they can get
Speaker 4: in the suburbs there in that part of Jersey, they're like,
Speaker 4: oh my god, a backyard and this and that.
Speaker 2: Yes, and we have my parents have a double lot
Speaker 2: and it's five bedrooms, two full kitchens. But and it's
Speaker 2: paid off. I paid it off for them two years ago.
Speaker 2: And honestly, they're not looking to move. They love, you know,
Speaker 2: their neighborhood. But I was just thinking to myself like, oh,
Speaker 2: you know, if they ever want to move when we
Speaker 2: have to sell it. I would hate to sell our
Speaker 2: family home because I wasn't sure if we would get
Speaker 2: you know, people would pay rent. It's the house, to
Speaker 2: your point, is not this McMansion. It's actually even though
Speaker 2: it has the five bedrooms, good sized, three full best,
Speaker 2: but it's still a modest size for like a Westfield.
Speaker 2: So yeah, so that's good to know.
Speaker 4: Yeah, Yeah, I think Westfield has a pretty strong market
Speaker 4: and you know, even more than Mountainside, honestly because of
Speaker 4: the downtown area and a little bit more. I don't know,
Speaker 4: maybe Cache so to speak. But I've been super super
Speaker 4: happy with everything, and I think that if somebody does have,
Speaker 4: you know, stability and financial wherewithal. I'm a huge believer
Speaker 4: in real estate and I think that it is something
Speaker 4: that people should kind of dip their toes into. I'm
Speaker 4: not a person who tells who says like, oh my god,
Speaker 4: every single person should be a homeowner and blah blah blah,
Speaker 4: because honestly, so many different situations and sometimes people think, well, gosh,
Speaker 4: I should start my own thing, I should go from
Speaker 4: renting to owning, and then I should get an investment property. Well, honestly,
Speaker 4: I know several people who are right now who are renters,
Speaker 4: who are looking at buying investment properties, and they're very
Speaker 4: clear on the fact that no, they don't want to
Speaker 4: be an owner for a whole you know, variety of reasons,
Speaker 4: but they do want to develop passive income streams.
Speaker 3: They do want to.
Speaker 4: Have some income outside of their normal their their their
Speaker 4: nine to five jobs. For me, again, it's part of
Speaker 4: our long term uh and retirement strategy. I like the
Speaker 4: idea that even though you know, keep investing in the
Speaker 4: stock market, you can do other things.
Speaker 3: I actually like hard assets.
Speaker 4: I like tangible things because I can I can manage
Speaker 4: this risk so much better. You know, in theory, at
Speaker 4: least a stock can go to zero, a company can
Speaker 4: go bankrupt. You know, all kind of stuff can go wrong.
Speaker 4: Nothing's gonna go wrong with my real estate investment that
Speaker 4: I haven't already covered. So what's the worst that could happen?
Speaker 4: A fire could happen and literally level the thing to
Speaker 4: the ground. Well I got insurance for that. You know,
Speaker 4: a store, a storm, a tornado, or a hurricane, something
Speaker 4: could come, and well I got insurance for that. You know,
Speaker 4: you know, we got a ridiculous amount of insurance of
Speaker 4: the wazoo. But but over all, I'm very comfortable that
Speaker 4: this is not only a series of appreciating assets, but
Speaker 4: that this is something that will, you know, as we
Speaker 4: retire or contemplate we call it being work optional. We're like, oh,
Speaker 4: this gives us more flexibility, This gives us more of
Speaker 4: a chance to say, oh, you know, no to stuff
Speaker 4: that I don't.
Speaker 3: Want to do.
Speaker 4: And you know, it's just a much more comfortable kind
Speaker 4: of positioning of being diversified.
Speaker 1: So your strategy and like the holistic look at your
Speaker 1: retirement goals. It's interesting and I like that you made
Speaker 1: the distinction between like hard assets and stock market investing.
Speaker 1: Can you talk a little bit about how you like,
Speaker 1: I don't know if you how do you quantify when
Speaker 1: you have this many properties? I don't know how you quantify,
Speaker 1: you know, I guess you add up all your mortgages
Speaker 1: and then the value of the homes and you get
Speaker 1: your equity and that's your you know, measure of asset there.
Speaker 1: But when it comes to like how much you guys
Speaker 1: continue to invest in the market, how do you are
Speaker 1: you more leaning on the real estate side? Are you
Speaker 1: still in the market, Like, how do how do you
Speaker 1: guys think about, you know, diversifying your portfolio?
Speaker 4: Now, okay, so that's a great question. And the first
Speaker 4: thing that I do when I'm looking to see for
Speaker 4: acquisition purposes, I'm looking at ROI and I have pretty
Speaker 4: aggressive targets. I typically want to see like a twenty
Speaker 4: percent return.
Speaker 3: On my investment.
Speaker 4: However, I would be willing, you know, if I say
Speaker 4: this is a great market, I can see the prices
Speaker 4: because I always track you know, prices to see like
Speaker 4: trends and what's happened. Like literally, Jakatas, the property that
Speaker 4: we bought in twenty nineteen for one fifty eight, is
Speaker 4: valued right now about one hundred and eighty thousand, and
Speaker 4: so when I see numbers like that, I'm like, oh, okay, great,
Speaker 4: you know, let me go get.
Speaker 3: Another one right there.
Speaker 4: But like even today, Early and I were talking about
Speaker 4: Amazon and we keep and this is like ridiculous. But
Speaker 4: in gem, I am more comfortable investing in real estate
Speaker 4: than I am in the stock market.
Speaker 3: And overall, like what.
Speaker 4: I tell people, like the average person for their advice,
Speaker 4: I'm gonna literally tell them stick to mutual funds, you know,
Speaker 4: get yourself an index fund, et cetera. But again, because
Speaker 4: I have actually a pretty high risk tolerance. My husband
Speaker 4: is more fiscally conservative than I am. But he's like, okay,
Speaker 4: come on, let's go get some Amazon stock.
Speaker 3: Let's go get you know.
Speaker 4: And about you know, maybe a year ago, I said,
Speaker 4: oh okay, earl, let's you know, we were looking at
Speaker 4: different things to do with, you know, different buckets of money,
Speaker 4: and I was saying, I put it on paper, and
Speaker 4: I showed him my thing, and I said, you know what,
Speaker 4: we just need to buy some some Amazon and some Netflix,
Speaker 4: and you know, just call the day and just leave
Speaker 4: it in there and just don't even look at it.
Speaker 4: So every like three or four months, I've been showing
Speaker 4: him like, oh dang, look at this, look at this.
Speaker 4: Then I'm like, Terry's gonna like tell kill me, you know,
Speaker 4: Terry Egoma.
Speaker 3: I took a stock trading class with her.
Speaker 2: I love her.
Speaker 3: Oh I love her too.
Speaker 4: So literally over the weekend, Earl was like, just pull
Speaker 4: the trigger, buy the dag on thing. And just you know,
Speaker 4: so he asked me today we went out on a
Speaker 4: walk today and he was like, okay, so where is Amazon?
Speaker 4: And and I was giving him pricing and I you know,
Speaker 4: I was telling.
Speaker 3: Him, oh no, it's up today, and.
Speaker 4: You know, but overall, you know, honestly, I am. I
Speaker 4: like the idea of set it and forget it to
Speaker 4: a certain extent, and I do still think like it's
Speaker 4: important to keep things in just you know, a total
Speaker 4: market index fund or even if you're just like happen
Speaker 4: to be into tech or you want to be a
Speaker 4: dabbling and fangstocks, you know, Facebook, Amazon, Apple, you know.
Speaker 3: Netflix, Google kind of thing.
Speaker 4: Then you can just literally buy a total market index
Speaker 4: fund and you'll have very high exposure in that in
Speaker 4: that sector as well.
Speaker 1: Oh yeah, yeh yeah, we know that. We tell people
Speaker 1: that all the time. What does Lynette do well when
Speaker 1: you get when you get like it's your main source
Speaker 1: of income, you know, from your coaching business and all
Speaker 1: of that, Like, do you have some sort of like
Speaker 1: set in stone rules. I'm like, okay, I'm gonna put
Speaker 1: thirty percent here. This is going to go in the
Speaker 1: real estate savings funds? Like yeah, sort of how do
Speaker 1: you think about it? Or I'm gonna you know, do
Speaker 1: you have like your standard mutual fund that you invest
Speaker 1: in and then you have like, you know, individual stocks
Speaker 1: on the side that you and Earl you know, can
Speaker 1: play around with. What does that breakdown look like?
Speaker 4: I cannot say that I've literally attempted or intentionally designed
Speaker 4: a sort of an overall portfolio that's like okay, let
Speaker 4: me stay and you know, seventy percent stocks and twenty
Speaker 4: percent or rather seventy percent real estate, twenty percent you know,
Speaker 4: stocks or mutual funds and ten percent individual.
Speaker 3: Stocks, et cetera.
Speaker 4: Not at all and so if you want to know
Speaker 4: what we do just in general, yes, some investments, but
Speaker 4: the vast majority is actually in the last two years
Speaker 4: in real estate and in cash, like a ridiculous amount.
Speaker 4: And so Earl will send me these emails.
Speaker 3: And he was like, see, it's not just me.
Speaker 4: He'll like, he'll see an article and I don't know,
Speaker 4: in Forbes or something and says the rich are hoarding cash,
Speaker 4: you know, and it's like, and he'll send me this
Speaker 4: stuff like now during the pandemic. I'm like, yeah, everybody's
Speaker 4: hoarding cash now.
Speaker 3: Or it's like, you know, we.
Speaker 4: Have buckets of money for different things, right, and I
Speaker 4: in general, I don't mind having high levels of cash
Speaker 4: for just you know, emergencies, for the unexpected. And he
Speaker 4: always has a thing he calls it, quote unquote the
Speaker 4: perfect storm, meaning like, but what if everything goes to
Speaker 4: hell in a hand basket?
Speaker 2: Who Earl is my That is my twin right there,
Speaker 2: because I always think.
Speaker 1: Like that, wait, army already in the handbasket on the
Speaker 1: way to help. That's what it feels like.
Speaker 3: That's what I've been saying. I've been like, can.
Speaker 4: You know, But I'm like, I it makes me antsy
Speaker 4: to see so much cash that's not being put to use.
Speaker 4: So because I'm like I could begin a return on
Speaker 4: this that's.
Speaker 1: Been to the That's just that's different between my husband
Speaker 1: and I. We have very different investing philosophies, and we're
Speaker 1: constantly in this tug of war. You know, he wants
Speaker 1: to do this, I want to go there. It's hard
Speaker 1: to find a middle ground. So it's good to hear that, y'all.
Speaker 1: Even y'all haven't figured it out.
Speaker 3: Oh no, we totally.
Speaker 4: But can I tell you this one thing, this part
Speaker 4: I have discovered. Honestly, there's almost like no wrong answer.
Speaker 4: The idea is do something, Just go for it. I'm
Speaker 4: not saying you will never have a loss. You should,
Speaker 4: you know, do your homework and do your due diligence,
Speaker 4: but just in general, trust me, you'll be so much
Speaker 4: happier later a year from now, two years from now,
Speaker 4: three years from now. It's just about prioritizing, like, okay,
Speaker 4: what's your we do first. I don't regret any purchase
Speaker 4: we made, just like even on the spending front, when
Speaker 4: I was you know, traveling like a like a mad
Speaker 4: woman and going out of the country four times a year.
Speaker 4: You know, I don't regret it so well.
Speaker 1: I think, hold on one second, tip, did you yeah,
Speaker 1: I have to jump Tiffany has to go. Oh no,
Speaker 1: it's it's past seven, Tiffany has to go.
Speaker 2: Okay, So do you want to do you want to
Speaker 2: do like a wrap up?
Speaker 1: We can let me I have like one more question, Okay, okay, yeah,
Speaker 1: let's wrap up with Lynnette. And uh you guys be
Speaker 1: a fam you want to stick around with me? Lynette? Yes,
Speaker 1: of course, right, Okay, Lynnette, So we're still here, and
Speaker 1: you were just talking about sort of there's no right
Speaker 1: way to do things and how just do something, do anything.
Speaker 1: I'm constantly saying that. I'm like, you can obsess over
Speaker 1: the right way to do it, or you know, the
Speaker 1: right amount or what perfect star alignment you need before
Speaker 1: you jump in, but then you're kind of wasting time,
Speaker 1: right absolutely.
Speaker 4: And again, my even me sort of looking at at
Speaker 4: am on is a great reflection of that, because all
Speaker 4: of the time you spent, you know, fretting over thinking
Speaker 4: about waiting for the right time to get.
Speaker 3: In, It's like, okay, well the stock is moving, you know,
Speaker 3: and so.
Speaker 4: Again, and that's my own risk tolerance that's my own
Speaker 4: you know, sort of appetite and me wanting to make
Speaker 4: sure like okay, okay.
Speaker 3: Earl, you're gonna be good, and he's like, do it already.
Speaker 1: You know, it's good to have someone more conservative kind
Speaker 1: of holding you back. Maybe you need a little bit
Speaker 1: of that balance, yeah, or at least someone asking the
Speaker 1: questions that I'm a hot head and I like to
Speaker 1: move quickly. If someone slows me down and ask questions,
Speaker 1: then maybe I won't be so you know, quick to
Speaker 1: jump at something right.
Speaker 4: And I really do think that like a huge part
Speaker 4: of marriage is that whole yin and yang thing where
Speaker 4: it's good to have that counterbalance because you know, two
Speaker 4: people forging going right ahead you might fall off a cliff,
Speaker 4: you know, and two snails you just kind of never
Speaker 4: get anything done. So it is necessary to have that
Speaker 4: sort of middle ground. Overall, though, this part I have learned,
Speaker 4: like I said, is that so many times when people
Speaker 4: fall victim to inertia or to just doing nothing, they
Speaker 4: kind of get paralyzed with fear, they get information overload,
Speaker 4: and then they just literally do nothing and then yeah,
Speaker 4: life kind of keeps passing them by. That's not what
Speaker 4: I'm talking about I mean the difference between you know,
Speaker 4: a three month or six month or twelve months, and
Speaker 4: then it's like, ah, you know, but overall you're not
Speaker 4: going to look back like two years, three years, you know,
Speaker 4: in the medium term range or certainly a long term
Speaker 4: range having done something to invest. Even if you said,
Speaker 4: oh my gosh, should I save more money or pay
Speaker 4: off debt first, you know, should I buy this one property,
Speaker 4: it's kind of like, go for it. Stop talking yourself
Speaker 4: out of getting your financial blessings.
Speaker 3: It's you know, it's a lot of it is in
Speaker 3: your head.
Speaker 1: And I think, well, if we can just remind the
Speaker 1: folks this is called brown ambition. And I feel like
Speaker 1: brown and black people, especially when we're starting to build, well,
Speaker 1: we are so often the only ones or the first
Speaker 1: or you know, we don't have the benefit of a
Speaker 1: lot of people to to, you know, like an uncle
Speaker 1: or an aunt or a grandparent whatever, to sit us
Speaker 1: down and explain how things work. And so it is,
Speaker 1: it's it feels riskier because you know, and I'm even
Speaker 1: just speaking for myself here, but there's not really a
Speaker 1: blueprint for it. And yeah, you do kind of have
Speaker 1: to give yourself more of a push because you may
Speaker 1: not be one of several you know in your circle
Speaker 1: to have done the thing like your children, Like this
Speaker 1: is the true meaning of generational wealth. It feels like
Speaker 1: you've really set your kids up for success. And that's
Speaker 1: certainly as a new mom. You know, I've got a
Speaker 1: little baby. I'm sure you can hear him. Oh boy.
Speaker 1: I like, that's goals for me one hundred percent. And
Speaker 1: before before I let you go, I do want to
Speaker 1: ask not to put it, not to put y'all your
Speaker 1: you know, your age out there. But y'all are coming
Speaker 1: from this at a very different perspective than like I
Speaker 1: have come from it, or Tiffany even. I mean, y'all
Speaker 1: your kids are you said your youngest is fourteen, when
Speaker 1: you've got kids in college, y'all are not twenty five investing.
Speaker 1: So the fact that you're more conservative, I mean, how
Speaker 1: does age and your closeness to what do you call
Speaker 1: it work optional retirement? How does that play into your
Speaker 1: strategy because people have to also take that into context
Speaker 1: when it comes to risk tolerance.
Speaker 4: Mandy, that's a great question, and I don't mind saying
Speaker 4: it at all. I turned fifty two this year. My
Speaker 4: husband is fifty six, and yes, so our oldest is
Speaker 4: twenty three, our son is twenty he'll be twenty one
Speaker 4: at the end of the year, and Alexis is fourteen.
Speaker 4: She turns fifteen in November. So it's definitely the case
Speaker 4: that our age is sort of where we are in
Speaker 4: terms of our career and our own personal timeline towards
Speaker 4: being work optional. That definitely plays a huge role in
Speaker 4: our risk tolerance and what we're willing and able to
Speaker 4: do emotionally able to do. Mostly so Alexis, for example,
Speaker 4: just started ninth grade. So we've had ever since, you know,
Speaker 4: Aziza went off to college, then Jakada went.
Speaker 3: Off to college. We've had our what we call our.
Speaker 4: Countdown to the kids being g and g grown and gone,
Speaker 4: and so now we're at that point where we're like, wow,
Speaker 4: we can see, you know, the end of the tunnel
Speaker 4: kind of four more years, Alexis will be going off
Speaker 4: to college. So at that point, in four more years
Speaker 4: she'll go through and then she'll have you know, four
Speaker 4: years of undergrad and potentially if she you know, chooses
Speaker 4: to keep going on more. But certainly we've already committed
Speaker 4: to being by the time she goes off to college,
Speaker 4: being at that work optional phase, being financially able to
Speaker 4: just be like, Okay, we're good and we.
Speaker 3: Don't have to work anymore. We don't, you know, we
Speaker 3: don't want to, we don't need to.
Speaker 4: So that means to continuing, continuing to do what we
Speaker 4: promised our kids because we have other like I said.
Speaker 3: Just paying for college.
Speaker 4: That's a challenge, you know, to tell them, Okay, you
Speaker 4: won't have student loans. And it's all in the context
Speaker 4: of yes, we're you know, getting older.
Speaker 3: None of us is getting any younger.
Speaker 4: Even beyond that, though everybody has their own kind of
Speaker 4: risk tolerance and their own appetite for quote unquote going
Speaker 4: for it. For me, the real estate side of things
Speaker 4: does feel like a great way to build wealth, to
Speaker 4: leave a financial legacy for my kids, to teach them
Speaker 4: about the value of home ownership, especially at a time
Speaker 4: when we're having this national racial reckoning and we're highlighting
Speaker 4: so much the disparities, the income inequalities, the structural racism
Speaker 4: that black folks have faced that continue to affect us
Speaker 4: to this day. So much so that for whites, the
Speaker 4: home ownership rate in this country is seventy seven percent,
Speaker 4: and for African Americans, it's about forty four percent.
Speaker 3: That's a huge gap.
Speaker 4: And so when I look at property building and wealth
Speaker 4: building and just buying a first home and then a
Speaker 4: second and a third and a fourth and a fifth
Speaker 4: and sixth and seventh and eighth, hell yeah, I'm proud
Speaker 4: of it. And I do want to blaze a path
Speaker 4: and I do want to show people that it can
Speaker 4: be done, and I do want to inspire and light
Speaker 4: a fire under people to know that it's not rocket science.
Speaker 4: It's like once you kind of learn and get the
Speaker 4: basics down, like what should I be looking for, how
Speaker 4: should I do it?
Speaker 3: What are the bank requirements and the.
Speaker 4: Qualifications, It's doable and so and again for me, like
Speaker 4: I said, I feel so strongly and so passionately about
Speaker 4: real estate as a pathway to wealth building. You know,
Speaker 4: I did a book years ago called The Money Coach's
Speaker 4: Guide to Your First Million, and it was obviously focused
Speaker 4: on wealth building and becoming a millionaire.
Speaker 1: Et cetera.
Speaker 4: But the idea there I laid out the different pathways
Speaker 4: to building wealth, and of course real estate was one
Speaker 4: of those pathways. And many you're talking to a girl
Speaker 4: who grew up you know, in Los Angeles in a
Speaker 4: two bedroom apartment my entire life. You know, my parents
Speaker 4: divorced when I was seven years old, and my parents
Speaker 4: had five daughters. So for most of my life it
Speaker 4: was my mother in one bedroom in an apartment and
Speaker 4: me and my other sisters in the other bedroom, so
Speaker 4: two sets of bunk beds, you know, with five girls
Speaker 4: in those four bunk beds. And so yeah, I definitely
Speaker 4: recognize that. Oo, this is you know a big difference
Speaker 4: from how I was raised and what I got to experience.
Speaker 4: But my kids have known another life, and hopefully they'll
Speaker 4: do better and they'll you know, show even better, stronger
Speaker 4: pathway to.
Speaker 3: Teach their kids.
Speaker 4: And I hope they excel me in every way possible
Speaker 4: and exceed, you know, far beyond what Earl.
Speaker 3: And I have been able toccomplished.
Speaker 1: Well, that's beautiful. And sometimes I you know, people and
Speaker 1: ask us and they come to the show, and you know,
Speaker 1: we're a personal finance and career and investing show. At
Speaker 1: the same time, it's like racial injustice is so intertwined
Speaker 1: in the fabric of financial security for African Americans, for
Speaker 1: black families in this country, so it's impossible for us
Speaker 1: to talk about money without talking about I think race,
Speaker 1: and you know, I think that's the that's the intent
Speaker 1: of our show is really to speak to people from
Speaker 1: that place. Like we know that you may not like
Speaker 1: you may be the first or one of few you know,
Speaker 1: in your family to be pursuing this, but like you said, Lynette,
Speaker 1: it's not that hard and maybe we can be the
Speaker 1: friendly voices in your head giving you that little push,
Speaker 1: you know, to start building wealth. And I think all
Speaker 1: the protests and the reckoning that we're in right now,
Speaker 1: that's that's much needed. The rage is justified. But I
Speaker 1: also feel like what can we control. We can get
Speaker 1: out there, we can earn our coins and we can
Speaker 1: build wealth, we can own things, we can take back
Speaker 1: ownership of land property. For me, that's part of the
Speaker 1: you know, that's really the endgame. It's like you said,
Speaker 1: it's to make things better and to you know, take
Speaker 1: some steps forward, take a little bit of risk, and
Speaker 1: not you know, not wait for someone to make things right.
Speaker 1: I think we can do our best to make things right.
Speaker 3: That's right, that's right, you said it.
Speaker 1: Well, thank you so much for coming on this show.
Speaker 1: I'm sad you are very well couldn't stay for the end.
Speaker 1: But I'm glad to have you for these little, these
Speaker 1: few extra minutes by myself, all to myself, Miss Linnette. Well,
Speaker 1: tell folks how they can find you. Where are you
Speaker 1: at these days?
Speaker 4: Twitter, Insta, Yeah, I you know, I'm everywhere. I have Instagram, Facebook, Twitter, LinkedIn, YouTube,
Speaker 4: all of that, and then my own sites of course,
Speaker 4: my free financial advice i'd ask the money coach dot com.
Speaker 4: And then our video based platform for group coaching, et
Speaker 4: cetera is money Coach University dot com. I've just been so,
Speaker 4: you know, I've been on Twitter a lot more than
Speaker 4: I've been on Facebook, and I just mainly, you know,
Speaker 4: I just feel so distracted, Honestly, I feel so like
Speaker 4: there's just so much heaviness, you know, that we're all
Speaker 4: kind of dealing with, and so I haven't been as
Speaker 4: active on social you know, just mainly because I'm like
Speaker 4: keeping my head down, trying to you know, keep my
Speaker 4: own sanity and keep my family tight and together and
Speaker 4: you know, social distancing and deal with the pandemic and
Speaker 4: you know, watching the craziness that that is the run
Speaker 4: up to November third, when the real craziness will start,
Speaker 4: you know.
Speaker 3: Yeah, So We'll.
Speaker 1: Protect yourself any way you can, and if that means
Speaker 1: social media break, that's for me. It's like throw yourself
Speaker 1: into work and you know, focus on what you can control.
Speaker 1: It seems healthy, but you're right, yeah, it's you know,
Speaker 1: we can sit here talking about real estate and then I,
Speaker 1: you know, acknowledge the craziness that's happening in the country
Speaker 1: at the same time. Well, that's why I even more
Speaker 1: am grateful for your time. Thank you, thank you, thank
Speaker 1: you for spending some time with us. I know there's
Speaker 1: so many demands on everyone's time these days, everyone struggling
Speaker 1: the pandemic, with crying babies and snoring husbands and kids
Speaker 1: at home, so we really love to have you on
Speaker 1: the show. Lynette. Thank you for joining us again.
Speaker 3: Thank you, Mandy, appreciate it all.
Speaker 1: Right, you take care and you guys check the show notes.
Speaker 1: We'll put links to the Money Coach, University and all
Speaker 1: all Lynette socials. Thank you again, Lynette for joining us.