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Speaker 1: Real question, if you're a beginning investor you want to
Speaker 1: invest in real estate, what's your framework for what to
Speaker 1: look for in a property or multi family to invest
Speaker 1: in a lot of this stuff is regional, so the
Speaker 1: advice would be regional if you are serious, Like if
Speaker 1: you are a real serious want to be real estate investor,
Speaker 1: it's a few things that you have to You have
Speaker 1: to first be in a mindset to be an investor,
Speaker 1: So stay away from the cars. Like I see a
Speaker 1: lot of people, we hear all the stuff about yo.
Speaker 1: I had a seven eighty credit score and I made
Speaker 1: one hundred and fifty thousand dollars and I couldn't secure
Speaker 1: a mortgage. Yo, it's racism. And it's like, nah, it's
Speaker 1: not racism. You spend too much money. You might make
Speaker 1: two fifty, you might make three hundred, but your bills
Speaker 1: are up here, you know what I'm saying. Like you
Speaker 1: got two benzes, you got a g wagon, your wife
Speaker 1: got a car, like all of those things when you
Speaker 1: want to be a real investor. In my opinion, real
Speaker 1: estate investing is not hard. The concepts are simple. You
Speaker 1: know what a hard part is most of us are
Speaker 1: not disciplined. When you really want to start saving money,
Speaker 1: most of us can't. We can't stop going on vacation,
Speaker 1: we can't stop buying frivolous things, we can't stop buying
Speaker 1: depreciating assets, and so that it's a counterpro counterproductive thing
Speaker 1: when you really want to be an investor, like we'll
Speaker 1: go buy a car six months before you're trying to
Speaker 1: buy a house. It doesn't make sense. It messes up
Speaker 1: your ratios. It's just a bunch of things. But as
Speaker 1: I was saying, it's regional. Real estate is regional. So
Speaker 1: if I was a beginning real estate investor. If I
Speaker 1: could advise somebody, I live in New Jersey. We all
Speaker 1: are well shoddy and Troit, we're all from the trial state.
Speaker 1: I would advise anybody to start in the multifamilies. The
Speaker 1: multifamilies are great with leveraging expenses. So if you have
Speaker 1: a four family, let's just hypothetic, give an example. You
Speaker 1: can buy four family four million dollars, you get three rents.
Speaker 1: You get what I'm saying. So, and what the mortgage
Speaker 1: companies will do is they'll take those three rents that
Speaker 1: you are gonna acquire once you purchase the property, they
Speaker 1: add that to whatever your current salary is and they
Speaker 1: combine them, and that is what they get to qualify you.
Speaker 1: So if you have a million dollar property and you're
Speaker 1: getting four thousand dollars a month, right, that's twelve grand,
Speaker 1: they take eighty percent of that, They add that to
Speaker 1: your salary and they use that to qualify you. But
Speaker 1: in many instances, when you pick up that piece of property,
Speaker 1: you can live in that fourth unit rent free. You
Speaker 1: know what I'm saying, Like the contingent plum with the
Speaker 1: rents already in real estate investor, you make I don't know,
Speaker 1: eighty ninety grand, one hundred grand, Go find a multifamily.
Speaker 1: What happens is our egos start to get into play.
Speaker 1: Like I've had people say I don't want to live
Speaker 1: with anybody, and it's like, you live with people. Now
Speaker 1: you live in an apartment. Now it's somebody right next
Speaker 1: door to you, it's somebody above you, it's somebody below you.
Speaker 1: So you're already living in somebody else's property. Now, why
Speaker 1: not living your own? Why not reap the tax benefits
Speaker 1: from the depreciation in the rental real estate stuff that
Speaker 1: you're going to acquire that you don't get. Now, Uncle
Speaker 1: Sam is kicking your ass. You're an RN, You're doing
Speaker 1: mad overtime. Uncle Sam is taking all your money. A
Speaker 1: lot of that stuff is mental when it comes to
Speaker 1: investing in real estate. You got to change your mindset
Speaker 1: and say, hey, this is what I want to do.
Speaker 1: I want to be an investor. I'm gonna get a
Speaker 1: four family, I'll live in it for a year. I'll
Speaker 1: take advantage of my FAHA benefits where I only got
Speaker 1: to put three and a half percent down as opposed
Speaker 1: to the twenty, and then next year I could use
Speaker 1: my faha again and go maybe get a single family
Speaker 1: or get a duplex. You know what I'm saying, Like,
Speaker 1: there are things that you could take advantage of that
Speaker 1: are just offered out here that most people don't know.
Speaker 1: You got to learn to educate yourself too, But ask people.
Speaker 1: I think that you know, especially with what you guys
Speaker 1: are doing, what some of the other people are doing
Speaker 1: in the space. Knowledge that I didn't have twenty years
Speaker 1: ago is everywhere. Like when I started twenty years ago, Dog,
Speaker 1: I was reading everything on Google, you know what I'm saying.
Speaker 1: I was getting all my information from Google. And that's
Speaker 1: how I started jumping off the bledge with no parachute,
Speaker 1: just you know, learning on your way down.
Speaker 3: So I've always heard that, you know, contractors use money
Speaker 3: from new jobs to pay for old jobs, right, and
Speaker 3: so I'm interested to hear from a contract that his
Speaker 3: perspective on that, and then also what is recommended the
Speaker 3: positive amounts that you should give to a car. I've
Speaker 3: also been educated that you should never give a contract
Speaker 3: a full amount. You're paying stages or is it like
Speaker 3: you pay ten percent, you pay when it's completed. How
Speaker 3: do you go about actually.
Speaker 1: You know, doing that? It depends on the scale of
Speaker 1: the job, right, or the scale I mean the scope
Speaker 1: of the project. So New Jersey state laws, a contractor
Speaker 1: cannot demand more than third by law. Now, if we
Speaker 1: agree to hey, I need fifty percent down, and it's
Speaker 1: okay with you, then that's fine. Like the terms are
Speaker 1: the terms. Whatever we agree upon contractually are the terms.
Speaker 1: But I recommend never giving anybody all of the money.
Speaker 1: You need to have leverage. So if I'm going to
Speaker 1: build a house for Shati and he gives me eighty
Speaker 1: percent of the money, what leverage do you now have?
Speaker 1: You get what I'm saying, Like I got eighty percent
Speaker 1: of the bread, I could run off sue me. I
Speaker 1: could pull a Donald Trump sue me. Okay, what I'm
Speaker 1: saying you literally have no leverage. Once you give somebody
Speaker 1: the lion's share of the money, what ensures that you're
Speaker 1: going to get the work done.
Speaker 3: But we have what we have a week with the
Speaker 3: thing that we're doing is construction loan, and they have
Speaker 3: a draw sheet, so it's like, Okay, the flooring is
Speaker 3: twenty thousand, and then the inspector comes. They have to
Speaker 3: make sure the flowing was done correctly. Then they get paid,
Speaker 3: and then you know, the sink is ten thousand, they
Speaker 3: have to make sure they sink. So it's like eighteen
Speaker 3: different things that have to be put in place.
Speaker 1: Completion.
Speaker 3: Yeah, so I mean that's done because the bank. But
Speaker 3: that's probably good. Even if you're not using bank money,
Speaker 3: you can still probably use that same thing, right, like
Speaker 3: a schedule of things that have to be done, and
Speaker 3: then as each one gets done, then you get paid.
Speaker 3: The problem is that a lot of contractors want to
Speaker 3: get paid before they do the work, not after the
Speaker 3: work is completed.
Speaker 1: So again, let's say hypothetically, I'll come out and I'll
Speaker 1: do your project. Right, it's electrical, it's plumbing, it's framing,
Speaker 1: its roofing, it's sidings, it's many different moving parts all
Speaker 1: at one time. So I might ask let's say the
Speaker 1: project is three hundred grand, just for round numbers, I
Speaker 1: might ask you for especially if I'm responsible for buying material.
Speaker 1: That's the thing too. You'll be responsible for buying material.
Speaker 1: Then the contractor has to also maintain a certain level
Speaker 1: of leveraging protection for himself. I'm not gonna just go
Speaker 1: out and buy twenty thousand dollars worth of material start
Speaker 1: this work. Out of my pocket, because there's just as
Speaker 1: many contractors are still money, there's as many homeowners that's
Speaker 1: still money. You get what I'm saying, Like, people owe
Speaker 1: me money to this day that I doubt I'll ever get.
Speaker 1: So it just has to be a rapport. If I'm
Speaker 1: doing a job for you in this three hundred grand,
Speaker 1: I'm not gonna ask you for three hundred grand. I
Speaker 1: just think that's asinine. But I might ask you for sixty, right,
Speaker 1: I might ask you for seventy grand, And then you'll
Speaker 1: see me working. You'll see me working. And then also,
Speaker 1: if you're building a house, or if you own a
Speaker 1: house and you're renovating a house, start familiarizing yourself with
Speaker 1: some of the terms, start familiarizing yourself with some of
Speaker 1: the materials. Designing the house is fun, it's dope. So
Speaker 1: you and your wife might stay at home depot picking
Speaker 1: out this, picking out that, picking out this. You start
Speaker 1: to see, Okay, this tile right here is three dollars
Speaker 1: a square it's seventeen dollars a square foot. You get
Speaker 1: what I'm saying. So a lot of times homeowners might
Speaker 1: want the best stuff that's not in your budget, that's
Speaker 1: not in your budget. So, and like when I write
Speaker 1: out of contract, my contracts is are fives is six
Speaker 1: pages long. A lot of contractors I see might be
Speaker 1: for three hundred grand, it'll say floring twenty seven thousand dollars.
Speaker 1: You haven't described what type of flooring is? Three quarter hardwood?
Speaker 1: Is it? Luxury? Vinyl? Toiel is it? You get what
Speaker 1: I'm saying. So all of those things are needed in
Speaker 1: a contract, like because somebody can say flooring, you signed here,
Speaker 1: flooring twenty seven grand. They didn't specify what type of florin.
Speaker 1: They didn't say this, They didn't save that. You know
Speaker 1: what I'm saying. So I put a cap on a
Speaker 1: tile amounts, I put a cat on certain stuff. Anything
Speaker 1: that is over seven dollars a square foot you got
Speaker 1: to pay out of pocket. I'm not gonna buy twenty
Speaker 1: dollars a square foot tile for you, and then I
Speaker 1: don't make any money off your bats. That's not gonna happen.
Speaker 1: You get what I'm saying. So the particulars need to
Speaker 1: be kind of ironed out. And if you're new to this,
Speaker 1: you may not have much experience in ironing out the particulars,
Speaker 1: but you gotta start reading. You gotta start asking questions.
Speaker 1: A lot of this stuff is scary, so I think
Speaker 1: educating yourself is paramount because you may not know what
Speaker 1: you're doing. But get as much education from Google, get
Speaker 1: as much education now from these websites as possible. It'll
Speaker 1: walk you through some of the unanswered questions.
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