The Professionalist Real Estate Investing Podcast
Whether you’re a seasoned investor, budding entrepreneur, or simply curious about diving into the world of real estate, this podcast is your ultimate guide to building wealth and achieving financial freedom through smart investing.
Join host Tony Jacobs, a real estate professional , as he explores actionable strategies, emerging trends, and real-world stories from top investors and industry experts. Each episode delivers valuable insights to help you navigate challenges, capitalize on opportunities, and grow your real estate portfolio with confidence.
Tune in for expert interviews, market updates, and tips to elevate your investing game—because success in real estate starts with the right knowledge and mindset.
Ready to take your investing journey to the next level? Hit that subscribe button and start building your future today!
The Professionalist Real Estate Investing Podcast
Mastering Real Estate: Strategies to Avoid Costly Mistakes with Mr. Rocky
Unlock the secrets of successful real estate investing and steer clear of costly pitfalls in this enlightening episode of the Professionals Real Estate Investing Podcast. With the insightful Mr. Rocky as our guest, we promise you'll walk away with actionable strategies to conquer the complex world of property investment. From the art of financial planning to mastering location and timing, we cover the essential elements every investor needs to know. Rocky shares invaluable personal experiences, illustrating the necessity of preparing for hidden costs and the importance of a financial safety net, ensuring listeners are equipped for all eventualities.
Discover how even minor upgrades, like a simple power wash, can transform a property's appeal and boost its market potential. We highlight the strategy of renovating the worst house in the best neighborhood, a tactic that can maximize your returns. This episode also delves into the wisdom of local realtors and the art of strategic buying, with anecdotes that underscore the impact of thorough market research and resourceful dealing. Our engaging discussion emphasizes the importance of understanding market fluctuations and interest rates, offering a roadmap for informed decision-making in real estate.
We also tackle the significance of thorough property inspections and the challenges of navigating interest rates. Learn from Rocky's guidance on avoiding common missteps, such as skipping critical inspections that could uncover structural issues or ignoring the nuances of mortgage rates. By focusing on personal priorities and setting clear goals, we share how to make sound financial choices and negotiate effectively. This episode serves as a comprehensive guide, packed with expert advice and personal stories, designed to empower you to make savvy real estate decisions and grow your investment portfolio with confidence.
Podcast Intro
Welcome to the Professionals Real Estate Investing Podcast. I'm with my guy, mr Rocky. How are you doing today, rocky Doing? Great Thanks for having me. No problem, get another episode in here for a financial literacy with investing in definitely real estate investing right here. This one is going to be avoid these mistakes when buying your first property which you have a little knowledge of. I should say, buying your first property which you have a little knowledge of, I should say so, the first one. We're going to get to it right here. Skipping proper financial planning. So the mistake not thoroughly assessing your budget, ignoring hidden costs like maintenance, taxes, insurance and overextending financially that's huge, because I mean you don't want to be coming out of pocket for these unexpected expenses. Not knowing your strategy of how to Get your property.
Speaker 2:Yeah, cuz, like a lot of times when I bought my house, they say I said I got. I got a fifteen thousand dollars to put down for my house at three point five, 5% or something like that. They were sent to put down. They're like, oh, you have anything else? I'm like, no, that's all I have. They're like like, well, there's fees and there's hidden. There's these fees on what fees? So, like, well, some places don't cover, like some places you have to pay for your uh appraisal, uh up front. And I'm like, well, how much is that? Like you know what? For six to nine hundred bucks, a thousand, like what. It's like money right there. And then the extra closing costs and the fees, uh, that the institutes that you're buying money from are getting a mortgage from. They got their own fees and stuff like that, and it's just all these little things.
Speaker 2:I'm just like what? So almost I basically had to sell my car. I sold my because I was like I had the house, it was on the contract, everything was good. And I said, oh, but you need X amount of money for for these extra closing costs. It's like when you buy a car, it's like, oh, the car on the sign says 50, you know, 50k, 20k, whatever kind of car you're buying but then you walk out there going did?
Speaker 2:I just finance $30,000 because, right, oh, you gotta get insurance, you got a, whatever warranties you want to get, and all that extra stuff like, oh my gosh, yeah. So it always gets you extra stuff. They always say have low, you know, have uh some money on site when you're buying a house. Have a little cushion space.
Speaker 2:Yeah, yeah, yeah, and because, like, even if you're, even if you had a house you rent to a rental property or something like that, you wait to buy a house. The biggest thing for us was you had to have so it's like 30 days to close right. The fastest they've done I think it was like 30 days or 28 days they closed 25 days that they closed the house. So that whole time frame you, you better have a some kind of rental agreement to where you're like, hey, can I wait this month out for a couple more weeks or whatever. If not, you're gonna have to get a hotel or something like that. So luckily we had enough money to like work out a deal with the landlord. But you know that money is gone because you're just getting back to the landlord even though you could have. You could have had it when you went to house exactly at that time.
Speaker 1:So, though that's the mistake you know, not knowing all the unexpected expenses and how to avoid it, get a pre-approved for your mortgage, factor in all the costs and have a financial cushion, like I said, financial cushion for the unexpected expenses. Yeah, that pre-approval helps out in so many different ways because you know what you're working with.
Speaker 2:You know exactly what you're working with. Yeah, they're like what, what? What's covered when you buy this house is yes, yeah, the appraisal cover is these little maintenance expenses on the house. Is that can be covered through the person that's the seller? Is he gonna cover it or is it gonna be rolled into my loan, or you know something? I do a pocket, so always have to have the little extra one aside for sure exactly yeah.
Speaker 1:So yes, that's skipping that proper financial planning. Number one. Number two this is huge also, especially when a person wants to live neglecting the research of the market. So the mistake rushing into a purchase without understanding the local market conditions, property values or neighborhood trends.
Speaker 2:Yeah, that was huge. That was huge because I remember when I was looking at my house, that's when the market started climbing. Like every month they're like, oh, it's going to go down a little bit and it just kept going up. Houses I was looking at for like $250, they're going for $275, $280. I was like, oh man, and these are your basic three beds and two bath house or whatever. Uh, and I was like okay, and going up. And then the house I was looking at across the street of where I was gonna actually buy the house yes it was for sale and it was.
Speaker 2:It was for sale for probably like fifty thousand dollars more than I was originally originally gonna pay for my house. But then I kept watching the market because I looked the market right now it's climbing, but it's not climbing fast. I know it's gonna go up. I just from like researching and watching houses for sale and just like watching literally for like three months, so like trying to find the home for us, and watching the pricing and interest rates, I saw everything go up slowly, slowly, slowly. And I told my wife look, if we buy this house, it it's gonna be the cheapest it is ever gonna be right now and it's just gonna go up. So if you wait another month it's gonna go up another ten thousand, whatever.
Speaker 2:And then we lost our shop and then the interest rates was at what I think the lowest at that time was like three percent, two%. You can always buy it down, but I think 3% to 4% was the average and it kept going up, up, up. And I was like, look, the house is expensive, but the mortgage rate it's where it's at. So I put all these factors into play and then I pulled the trigger on the house. Luckily the house price dropped because the guy wanted to sell it ASAP. Luckily, the house price dropped because the guy wanted to sell, he wanted to sell it ASAP.
Speaker 2:But just watching it the whole time watching the hose that I wanted to buy the area, the the homes that I want to buy in my price range and see how Anything was fluctuating, like it was going higher, low, Well, the sign for what the actual same price was, for how much more people put down and then interest rate, everything that's. That was key because I was like I would have never, I would have never known the market the whole time if I didn't study or look at the market and see what houses are selling, for, what they're selling, uh, renting for and selling for, um, I would have just never bought a home because like, oh, this house is so expensive yeah, they're so expensive, I can't buy.
Speaker 2:I can't buy. I get paid. Now. I was like if I can afford it, I can buy, I don't even care what it is. I was like if I can afford it because I know more. I know so much more now of the market, just by literally just watching Zillow and all these big companies and watching what houses are selling for and stuff. I was watching the whole time. I see houses dropping 10K, 5k lately.
Speaker 2:I was like oh, and then I tell my friends like hey, it's probably sad it feels, for some reason it feels like a good time to probably buy a house, because homes are getting priced, prices are dropping a little bit. People don't want to sell. No one's buying their houses, so you can probably even get lower and they're like dude, this house is for some 350 and we put it in for 340 and they took it. I was like, yeah man, I just felt like it was the time to do how to do it exactly and the boys are yeah, you're right like they're really there the market's been.
Speaker 2:They've been on the market for like over 30 days home, like that, which is a lot right yeah and he's like they're just want to sell. I was like dude a month ago. They probably would.
Speaker 1:It would have never bust 350, but the fact that all for that long, you know it's just timing to like and I'm glad you said, yeah, exactly timing, because you got to think, yeah, when it's on that long, especially it's like 30, 30 days, is like the barometer, they're like okay. So why is it? Why isn't yeah action? There could be a whole lot of action, but no one's pulled in the trigger.
Speaker 2:Yeah, just put any off off yeah, all kinds of situations like you may be priced the house too high, or maybe just the actual curb appeal is not nice, or maybe you know people get laid off lately. So now you're like, oh, maybe make sure wait. Or maybe the holidays are coming. A lot more houses get sold in the summer versus the wintertime. Right, no one's going to want to go to rain and take their baby and their wives to go look at the houses when it's raining and stuff. So like those factors are huge. Because I remember you telling me way back when, when you're looking at selling houses like dude, dude, it's, it's, it's cold, it's raining. Right now it slows down a little bit.
Speaker 1:I'm like, dude, that plays a huge factor because you have a, so you have like a super, super nice home that you're willing to sell and you're not getting as much traffic because it's cold outside, exactly and I tell people especially I mean it's a hard time to buy something, but when you do it with like these months of like, november, december, january, there's not a whole lot of traffic because everybody's worried about thanksgiving, christmas yeah but if a person can pull it off, oh, trust me, they're going to be, they're going to get the benefits of uh purchasing it at that time period.
Speaker 2:One one house. We had to go. We had to check uh. We had to check back uh twice because first time we looked at it was nice. But my realtor, he was like I'll come back cuz right now they haven't late last gift and everything. It was kind of gloomy day. We went back. I kid you that was a beautiful day, man, and they did last gave it and I was like dude, why is house a cleaner? Then one day did was some last gave us some old lawn chips and trees. I did fresh wash the house. I'm gonna do this house looks way different like they did they. I did a fresh wash of the house. I'm like dude, this house looks way different. Like did they paint this? No, they just fresh washed it On a nice sunny day. I was like dude, even timing of the day helps you sell the house. Yeah, definitely change it. I'm like, oh man everyone needs to get.
Speaker 1:Little 300 on fresh water can change the world of difference. Just sold your house, yeah, all right, that's yet neglecting, says, yet to avoid. Is it a how to avoid this? Neglecting the research, market study the market review, comparable sales and get to know the neighborhood. Consult your local realtor which is amazing, because there's a lot of realtors out there that know exactly what's going on with the market and just talk to someone that you're comfortable with. Yeah, basically. And then the next one, my favorite one, because real estate deals with anything that you get. I like this one too. Overlooking location.
Speaker 2:Location, location location Mistake.
Speaker 1:Choosing a property in a less than ideal location because it's cheaper? Yep, you don't want to. You don't want to buy a piece of property just because the piece of property is just available yeah, you want to buy a mansion in the desert.
Speaker 2:Ain't no one gonna visit you? Man, it's crazy. The location like that. I think a lot of podcasters that I do. You know real estate investing there's like buy the shittiest home in the in the most nicest neighborhood, fix it up and sell it like that's.
Speaker 1:You know if you could do that, which everyone's trying to do, that right, like how you got to think like how often does that happen to yeah yeah, you gotta be realistic about that like there's a reason why there's so many beautiful homes in so many different locations. But then I mean usually and we've seen this actually for a fact especially like in the area you're looking- at yeah, remember that one house it sold, but yeah, it sold, but yeah.
Speaker 1:Everybody like for the audience out there. This house is in a great location, but what it needed to be on TLC. Like you need all new landscaping the fence, because the fence all was coming down.
Speaker 2:Yep.
Speaker 1:It had a swimming pool, it had a hot tub.
Speaker 2:It was a pond. I think it was a pond yeah.
Speaker 1:Yeah, it was a pond and it was in a great location, but it took a lot of time.
Speaker 2:If I had the money I wouldn't drop money on anything, but I would buy that house and I would drop easy $100,000 in that thing. I could have 300% my. Roi yes easily, because the house was beautiful, the location was beautiful, beautiful the corner lot and everything but man.
Speaker 1:the location, location and they are already done something new inside that house, anyway, like they had stopped, yeah, they had stopped. They stopped working on it, like me, and renovation, like yeah. And another thing too. I'm gonna also expressing this point too, because when you were talking about it, we actually got to talk to the owner. Oh, yeah, and that's another way of helping with a realtor too. Since I'm a realtor and my boy was here looking at the house, I was able to, with all the resources I have, I was able to get the address where the young lady lived at and he was able to talk.
Speaker 2:Yeah, I was able to talk to her, and that was huge yeah, I said I sent her a letter and everything over, yeah, saying you were surprised.
Speaker 1:It was you got a return.
Speaker 2:I got a return message that I was like hey, I live neighborhood, I'm interested in your home I know that is vacant for a while like are you interested in selling it? Or whatever. I think you did you help, didn't you try draft up the letter? I think you drafted the letter and I kind of just put my tippets in there.
Speaker 1:Oh, yeah, yeah, I did, yeah, I did. Yeah, I did have a font for that. Yeah, everything for that. But yeah, you sent it out, you sent it out.
Speaker 2:And then a week or two later I think it was in Texas too, right? Yes, the lady lived in Texas, yes, yes. And then a week or two later I got a response back saying and she was like she's, like, she's surprised, and then that's when they I think your guy is trying to put an offer in or something like that she was, she was when she was wanting way too much for this.
Speaker 2:Oh yeah it's home it's way too much like investors gonna be like no way. But uh, man, that was pretty cool because that could have been, that could have been my first property, right there.
Speaker 1:Yeah, it only takes that one, it only takes down one, and thank god that the address that you did send it was still valid. Yes, true, for sure, and that's why I was actually I was in awe like wait, it went through. It was like, yeah, all the way in Texas at that.
Speaker 2:It's crazy yeah, but the house was worth it though. I yeah, yeah so, but the. The house was worth it, though I wonder I want to. Went through the whole pain. It even call you out the head, this chicken's house. It wasn't worth it, but, man, yeah, location was great.
Speaker 2:The house was it could have been. It could have been fixed up beautiful, right? Yeah, you bet. Four-bedroom, two-car garage, a pool corner lot. It was a two-story. Yes, it had had the the living room, that the living room, family room, dining room setup thing. It was huge. He was a square footage I think it was like 20 something. Yeah, it was, but it was a good size yeah oh man, yeah.
Speaker 1:So yeah, definitely with that overlooking location. How to avoid? It says prioritize the location, including, um, you know where, schools, public transportation, job hubs yeah, locations affects property value and resale potential that is huge.
Speaker 2:Yes, I keep telling my wife because we live on the main street, on placer, and uh, the main street connects, like our little subdivision, to the downtown area and then, like, with it we do the concerts and stuff yeah right and then like one of the main attractions where we come from is, uh, the sundown bridge.
Speaker 2:So like a lot of things happen on that main road and we connected to it and like throughout the years I think that throughout that made the last 10 years like they moved the costco closer to us. They moved that little uh stopping center and making that huge.
Speaker 2:Now you know that downtown's getting revamped the new pocket structures, new bars popping up, closing down, popping up new restaurants. I was like dude, our little, our little street, a little strip is. This is getting better and better, and so much this makes my Location even better and better.
Speaker 1:Yes.
Speaker 2:Keep. I was like we need to bring a Walmart our side and we be let's go.
Speaker 1:Generate yeah, it's your business, and buzz right there, right where you're at to yeah you know what you remember.
Speaker 2:If you ever, if you had a Walmart, your time you like oh man, we're moving up. You remember that.
Speaker 1:Yes, I remember when.
Speaker 2:Brembloff got their Walmart. I was like, oh my God, look, brembloff got their Walmart.
Speaker 1:I told somebody man, I make you sound old, rick, that makes me sound older here. I remember when Nintendo was out and I lived by Walmart in Kansas because Walmart actually started in Arkansas Arkansas, that's what they like calling it. Yeah, yeah. And then I used to shop at Walmart when I was man. We talking 1980. I told somebody. I said I think 1986. Yeah, you got it.
Speaker 1:I was little little and I used to be there when they used to have the free Nintendo games. You could play them and there would be little kids come by. They want to play them. Like I look at them like nope, you ain't anything. I got this game. Yeah, beat the whole damn game, basically a mama.
Speaker 2:Yeah, you can do that. Exactly, that's all I would do all right.
Speaker 1:The next one of number four, falling to conduct a proper inspection, the mistake skipping or rushing through the property inspection leading to unforeseen problems after purchase. Who do not want that in your life. That is a headache that is very hard to get rid of.
Speaker 2:Yeah, come move in the house. Kind of find out there's a buggy in the wall or I gotta turn.
Speaker 1:You have the huge termite problem or they lie about the new roof.
Speaker 2:Oh yeah, yeah, they spray something on new roof. Oh yeah, the roof.
Speaker 1:Yeah, they spray something on the roof with them underneath that.
Speaker 2:It's been up there for 25 years, dude, I I got a buddy that recently bought a house and it's starting to shift. Oh, it's shifted because the foundation it's a slab, slab foundation, so just you know, on the ground but the foundation has so much tree stuff around it, I guess the roots for eating it and they fit. And he's like, if you go and look in the house, there's little cracks in the, in the corners and stuff, because the whole house was supposed to be, you know, squared up but it started leaning. So all the all, the um, the ceilings had like little cracks and they, you can tell because they're, they got patched up by drywalls and stuff. You know they did drywall work. But you see through it and, like my buddy, he's, I think he did flooring and roofing, but he knew enough to be like this is new drywall, this is what's going on here, and he started asking, asking and then he, like I said, he did roofing and flooring, but he went to the attic, he started noticing the um, the trusses starting to work a little bit, and just that he's like, okay, let's do an inspection. He's like, yeah, this whole house is shifting.
Speaker 2:It went from like a 400k house to 250 counts real quick, because it's like this whole house needs to be lifted. Right, it needs to be lifted. Concrete needs, all that stuff needs to be taken out. Re-concrete all this stuff. You know, because you know once it shifts it's gonna just slide off or you know things will start snapping or whatever. Oh, but like that's huge, huge, yeah, so it's so. Yeah, that probably went down. I think he ended up passing, but he tried to still buy it, just because I think it was such a good opportunity If they would have sold it for the right price. But they were like no, I think they ended up selling it, though. That's a huge headache.
Speaker 1:Your house is shifting.
Speaker 2:Yeah, yeah, and especially yeah, I don't know, we didn't know exactly how bad it was, but they're just like, yeah, it's shifting, that's, that's that's all we had. That's all you had to hear about that he's like oh no, but that's yeah and that, and no one would have known that if you didn't have someone that was tuned to inspecting homes. Yes, right, is that not just like I do roofing, I do flooring. Like no, he's like I do everything but, you know, structurally this house is sound.
Speaker 2:But you can do, is you do you do inspections? When I bought my house, you do inspections for everything roof inspection, floor inspection, foundation, even soil inspection, plumbing, all that stuff. But that's just more money, more money. And those are the extra little fees, extra little costs that we're talking about earlier, that hey, make sure you have an extra, you know, little nest egg side pocket. Because if you go to the house and the first thing you want to do is like what, flush the toilet, turn the water on, turn the ac on, and the ac doesn't get as cold, right, so you might want to hire an ac guy come check it out. Or you turn the water on, it's a little, it's a little brown. For the first second you might have a plumber guy you know, because those aren't all included in your inspection.
Speaker 2:Inspection it's pretty uh if they're pretty broad, just kind of like look at the majority of the house.
Speaker 1:They're not really um usually.
Speaker 2:Usually it is they'll put, if it's a huge, if it's a problem of main concern.
Speaker 1:They'll have it in red writing Yep, Yep, yep, but then a lot of it will be we recommend this. We'll recommend that. Yeah, we recommend this.
Speaker 2:You can recommend the whole. Oh yeah, when I went, yeah, one of my realtor, his mentor, came with this and he was like we're looking at everything. He was like, he was just like me. He felt like he was gonna buy my house to with me we're like, he's like.
Speaker 1:This knob is loose.
Speaker 2:We can put that, see if they can fix that. I'm like you know, that's a $5 knob. He's like yeah, we can put it in the request. He think I really could do that, he's like yeah, you like these things. Like now they kind of all he's like let me see we get to do like all these little things. My rose here is doing that he can. You can add God dude.
Speaker 2:I kind of wanted him more than all the reason he's starting off you know, the mentor versus the mentee is I do, I'm trying to do some things he's a.
Speaker 1:No one was in the game.
Speaker 2:I think he was doing a room surf like 30 years. Okay, that's why he's in a game, but I just very, very humble and, just like he, his eye coordination was set on.
Speaker 1:Yeah, yeah, it says how to avoid, you know, following the conduct of proper inspection. It says hire a qualified home inspector To thoroughly access the property and ensure you are aware of any issues. In my main concern, especially when you buy a house, definitely, like you said, the roof. Definitely If you live in an area that has a lot of trees, definitely if you live in an area that has a lot of trees, because that can uproot, uplift the foundation and you can make it shift. You can actually make those roots, can actually make the home shift.
Speaker 2:Yep, and all your little concrete and stuff around the house, your walkways can start lifting.
Speaker 1:Yeah, a tripping hazard oh exactly, yeah, yeah, going down the sidewalk. Why is the sidewalk smooth? And then there's one's one, you know one square where it's up and it could be a root that's right there.
Speaker 2:That's why it's bucking it up like that yeah, all right.
Speaker 1:The next one considering uh, not considering long-term goals. The mistake buying a property does that that does not fit your long-term goals, such as family, uh, planning, yeah, commute or potential resale value. And then how would you want to avoid this? It says think about your future needs. Will the property still suit you in five to 10 years? Consider a resale value and the potential for appreciation. You want to definitely make sure, wherever you purchase at, is it going to be worth? Is it going to be worthwhile, like it. There's a lot of areas where I mean we don't hear it much of places like going down in value, but it does happen. But you always want to be in a place, like you said, location, location, location, inward. There's a good location. It's always going to go up. It's always gonna go up. Yeah, it's always gonna been. It's gonna benefit everyone. It's gonna benefit of our economy, it's gonna benefit you, it's gonna benefit the family, it's gonna benefit everything.
Speaker 2:That's going on in that location yeah, the location and like, when we talk about location, we're talking about like, is it close to shopping? Right, is it close to schools? You're gonna have kids, do you want to do? You want to ride? You Are you going to have kids? Do you want to drive, you know, across town to take your kids to school every day? Bus stops, shopping centers, parks, and then work, right, because I used to. So I used to work where I was like less than two, three minutes away from my work that amazing. Now I drive a half, but that's a whole different story.
Speaker 2:But yeah, all those little factors, um, played a part in the house we bought in our little subdivision. But initially, thinking like a single guy, maybe with a single guy, with my wife, maybe a kid on the way, at the time, I was like I want to live in a country, I want to buy a property, I want to have a huge shop, I want to buy property, I want to have a huge shop, I want to do all this stuff. I I don't want no neighbors, I hate people kind of thing. I don't see nobody. Uh, at the time I'm like, yeah, that's what I want, I'm not gonna spend you know this much money for that. And then my wife's like, no, because our kids, you know they need to be. I want them to be able to have neighbor kids and play and all this stuff and be able to go outside and have friends and ride their bikes and stuff. And I was like, oh, my God, you're right. You're so right, because I was thinking about myself Like, for me, maybe when we retire, that's what we can do. But as far as right now, our kids have neighbor friends.
Speaker 2:I think our first week we moved in we had a, they had a block party and invited us. We met all our neighbors that night. Oh, that was amazing. Uh, our kids, uh, our kids, go with, um, our neighbor's kids to school. Uh, they're in the same class, kind of thing. So it's, it's super nice and it's friendly. You know, luckily our neighborhood is mixed ages, so we have a lot of senior, senior residents and then we have younger, younger generations coming in and everyone wants to take care of the home, they want to do the upgrades and stuff like that. So all of us are in the same generation. So it's nice because we grow up with each other. I wouldn't have and that's you know, talk to neighbors and stuff like that and have like get-togethers, which is pretty cool.
Speaker 2:But I would have never, ever done that if I lived in the country no boys my boys would have been running digging holes and climbing trees, but they would never, you know yeah, rather bike down the street or anything like that. So it's, it's, uh, and, and there's schools right down the road. Uh, there's a lake that we live by, that we walk there literally every single day, uh, in the morning and in the evenings sunset, you know, sunrise uh, we met a lot of good neighbors around there and, uh, like my wife runs every day and she doesn't have to worry about crazy car drive back and forth weirdos you know bones or whatever, coming around, stray dogs, coyotes and things like that throughout the country.
Speaker 2:So she does that all every single day almost and uh, yeah, it'd be a different lifestyle if we lived over there. So, yeah, long term it was for sure the best thing for us at the time.
Speaker 1:That's really good. And then another one. This is number six. I'll run these down before the end of the episode. But number six I think is really good too is letting emotions drive decisions. The mistake falling in love with a property and making a decision based on emotions rather than financial and practical considerations. Yeah, I've seen some people like I love that right there. I'm like, well, do you know anything about it? Nope, I just love it. I'm like do you know the price range it's working with? Have you done any homes? No, it looks great. I just know you just can't go. That's almost like sight unseen. Like, oh, you just tell somebody what something's about and like I'm going to purchase it.
Speaker 2:Three baths, two baths sweet. I'll take it.
Speaker 1:You're like no.
Speaker 2:I remember this thing hits me hard, man, because I was three months looking for our home. When I first started looking at homes I was on every single website you can think of. I was even signed up for websites just to get the this, the, the um, personal newsletters and stuff to email. And uh, we looked at, I did the math, and we were around 80 to 90 homes in those three months. Some days we'll go see five, some days we'll see like one home, you know, four or five days a week, and my realtor was you look here.
Speaker 2:You told your realtor he's about to work for me he did, man, and and I thought at the end, uh, towards the end I thought you know, man, he sucks, but it would just. We would just get to a point where, like, we looked at so many homes and they all look the same to me, and I got to a point we looked at the 80, 90 homes. I only put two offers in, and one of those offers is the house I lived in now, because we the first couple homes we looked at. I I knew what I didn't want and then what I wanted, because I was like I could do a little fish jumper. No, no, I couldn't do that at the time because I was, uh, have a new baby coming, new job there it is. So I was like I don't have time to do that and I probably wouldn't do it for a long time. So, like all those little things, but, like, I got to a point where, like I like this house, if their bedroom's too bad, it looks all right, let's put it in and watch.
Speaker 2:Like, but you really want, you really want a garage. Like I was like, yeah, it has a little garage, it's like a single garage. She's like, yeah, but you really wanted to grow, that's the one thing you wanted. I was like, yeah, you're right, man, I'm settling, I am settling. So, yeah, when you start looking at homes, you can't. You know, sometimes you gotta step back and, uh, really set goals of exactly what you want and and stick with it. Because for me, I was like I could settle and my wife's like, no, you always wanted it, we had.
Speaker 2:We saw this one home that was beautiful, but I wanted backyard access. I want to be able to like, park something in the back or like, um, you know, get back there easily, instead of like a little girl, a little gate door. Yeah, because you know, every once in a while you want to, you know, you know, have a jump house or something like that, come in the back and you can't even get in there because there's no room and she's like but how, you can't get to the back. I was like, oh, you're right, you can't get this huge backyard, but you can't get to the back. I was like, oh, you're right, it was a huge backyard, but you can't get to the back, because it was between two homes and the side that connects the homes together was separated by trees and there's no way to get past there and I was like, oh yeah, you're right, no way to get back there.
Speaker 2:So I was selling because I was looking at homes so much and I was like, oh, looking at homes so much and I was man. But and then I see I see homes I really really wanted and I almost, I almost, overpaid for the home because it's like I want it. I look for this long. This is how to checking all the boxes. But either I need to, just I pay what they asking me, and my parents was like no, wait, wait, wait, let's start love. Like all right, if I lose this house, I'll be mad. And I listened to him. We got good, got a fair deal.
Speaker 1:That's good. That's good. I know your realtor was like I'm getting more. Yeah, he did a lot. He did a lot.
Speaker 2:I was telling I was similar realtor friends of my landlord, that was a little realtor. She's like he did all that. He looked at all the houses we did. I was like, yeah, we take our car and he'll take his and we'll just follow each other. She's like I would have done that. She's like first 20 houses I would have done. I was like what? No way, that's a lot of houses.
Speaker 1:Yeah, so he stuck in there. We got a good deal. He got a good. You know, little commission, it's like he didn't find that's good, that's real good, all right. The next one would be oh, this is a good one ignoring the impact of interest rates. The mistake is the focusing only on the property's price and not paying enough attention to the mortgage rates, which can significantly affect your monthly payments. She, that's huge.
Speaker 2:Yeah is that that I was what I bought my house. I didn't know anything about anything of ours, like I didn't know what a PR was.
Speaker 1:I say that way for those ones out there in your percentage rate.
Speaker 2:Yeah, I don't know what is that. She's like well, there's, there's, there's a couple. She's like this is what you were gonna pay every year and taxes, this is what you're gonna pay, and every year, and you know, your mortgage and all that stuff. Okay, like what's this APR? Oh so this is what we charge the money. Great, the mortgage company, this is what we charge. I'm like, is that annual? So you, no, this is what you charge this first year and that's it.
Speaker 2:But I was like learning all this stuff and I this is not even the interest rate of my house, this is just what the companies are charging, these institutes are charging for their services. Basically like, oh, what the heck is all this? And then, finally, we came down to interest rate for, you know, buying the house and uh, that's why, that's why I learned about buying points down, shopping around, because interest rates I think, like I said, when I bought my house, like you know, when you were like three, four or five percent, it was the highest at the time, maybe six, uh, depending on credit. And uh, I shopped around like six different companies. I narrowed it down to three companies and finally the last two companies had a very good interest rate at three point three, point three point five and three point two. And then I told the company I'm gonna go this company because they're they're gonna get me at 3.2 percent. And we went, we went through the whole thing. I get ready to literally pull my like we pulled the crane, everything getting ready. All I had to do was sign the docu sign and it was on right.
Speaker 2:Yeah and uh, I told the company I was gonna go with this one because you know it's a little lower. And he's like, hold on, let me talk to my underwriter. And then he came back okay, we could do 3.125. I was like, done, that's saving like an extra $10,000 right of the loan, yeah, or something crazy, a little more actually. But shop around with the interest rate was that was huge. To that I got friends that buy houses. Oh well, what companies did you go to?
Speaker 1:I just went through one yeah, they don't even shop around. It's like shop around.
Speaker 2:Oh my, it's so. It's so important to shop around for the interest rate, because every company wants your business yes as much as they say oh yeah, your credit score is not good or you don't have my money down or whatever. They want your business and they will adjust the interest rate. How much you need to put down all that stuff to make sure they get your business?
Speaker 1:Yes, so true.
Speaker 2:It's huge, yeah, and not knowing what you're going to be paying monthly versus long term is huge too, because you can pay. Well, the average home right now is like $2,500 or something like $3,000 for like a $300,000, $400,000 home or something like that a mortgage. But say, oh yeah, you're paying $2,500 and then some your neighbor same price home. Why is he only paying $2,000? But his interest rate is like $8,000 versus your interest rate at $5,000 like yeah, you're paying more up front.
Speaker 2:He's gonna eat at the end. If he's not paying his house up front, or he's paying his house before um the 30 years, he's gonna pay double, triple his house price because he wasn't aware of what he's paying. Yeah, it might be cheaper up front. You know your monkey paying like man that bag and interest is gonna kick you in the butt when you realize how much you're paying.
Speaker 2:That's true. Yeah, because when you buy a house, you buy a house and you start making your payments. Right, they don't. You don't start making payments on your principal until the upfront interest is paid off. Yes, exactly.
Speaker 1:A lot of people don't know that.
Speaker 2:Yeah, I didn't know what the heck that was like. What do you mean? Because you know, you look at your, you look at your uh, you look at your uh monthly statement.
Speaker 1:It's like there's no, haven't been any changes yeah, why why, is everything so still it's still the same.
Speaker 1:I'm still like I'm stuck and you're right. So how to avoid it is you gotta do your research of mortgage options and then lock in favorable interest rates and understand how changes in rates will impact your overall cost. Like I said, you got to do your research. There's so many different mortgage companies that are out there that will help you. You don't have to go with your standard ones here in your local town, at your banks or anything.
Speaker 2:The one I went to, the one. I went to was some guy in San Diego who was. I dealt with him the whole time over the phone. I never saw him once. I was like I still remember his name, yannick or something like that. But I remember talking to him the whole time on the refinance my home with some dude in San Diego and the only reason I knew about him because his email popped up saying oh good, you look like what's the best Mortgage companies, whatever he popped up, I clicked on it, I talked to him and then, yeah, after a couple days of running through the numbers and all that stuff and it, we closed the deal over the phone.
Speaker 2:Oh, I never. I was in my pjs the entire time, like you know so bad?
Speaker 1:all right. The next one, uh, which would be number eight, of understanding renovation costs. So the mistake not accurately calculating how much repairs and renovations will cost, leading to budget overruns, oh yeah, yeah, definitely. You know how much you're working with, though, man. It could be costly. It's not you like, I'd say, it's you like even people who do a fix and flip.
Speaker 1:Yeah they have. They have a budget, they know what they're. The cushion is how much they can put on anything. That's the same thing when purchasing a house that you think that you want to do upgrades, because I tell people when you buy a house, that house is not when you. When you buy a house, it's, it's for you. Now, when you sell a house and people are like, oh, they might want to keep this, do this. No, the way the people come in, they're thinking about if it's their house, yeah, so it's two different ways. Because they could be like you know what it's gonna be worth our while, because the way that the house looks to them, they'd be like you know we're gonna, we're gonna redo the bathroom.
Speaker 2:Yeah, we're gonna do you know.
Speaker 1:You know what we're gonna do. The one place that everybody's has their hands in the kitchen yeah, the colors, the colors nasty, exactly yeah we paid this house. It's up to their preference, cuz, so they'll. They'll do their own calculation like uh, okay, is it going to be worthwhile for us to even buy this house because we want to renovate? We want to, we want to do the renovation of this part and this part so it's up to.
Speaker 1:It's going to be up to that person, yeah, and it says how to how to avoid. It says get multiple estimates for any um potential renovations and add a buffer for unexpected expenses. Yeah, do your due diligence and shop around. Who's gonna be the ones to help with the renovations? Because there's so many people out there. But, you wanna make sure that they're credible too, because I mean, right now, this is 2024, going to 2025, and scamming is at an all time high. That's huge.
Speaker 2:Oh for sure. I always tell my wife, because she deals with a lot of our little things, that I don't work all the time. So, like you know, insurance and stuff like that she has to deal with it and she's she's in that field. So she talks to insurance companies and just different places of like like she get. The windshield was cracked. I was like well, it caught different companies and literally it went from all reputable con companies in rating and it went. The prices went from a hundred dollars to $500. Huge difference because some offer warranty.
Speaker 2:Uh, some shops were were not like a five-star shop. So so you know, the one place was like very dingy versus the other places. Like everyone goes to a safe light is the most popular one. They come to your house, right, they do right there, so a little more, but the convenience is. So all these little factors and we end up selling like mid mid, mid 300 something for a new windshield and Seth. Like they beat everybody even with the coming out to our house and doing it. So that was cool, but yeah, as far as like shopping around for-.
Speaker 1:Did you go? I'm excited to get mines done to my Yukon. Did y'all have to go? Y'all went through local. Was it someone local? Orall went through local? Was someone local or is it? Uh? It was someone local. Yeah, I went to uh to. To people out there who live in shasta county, the best windshield place I've ever experienced was ray's auto. Ray's auto glass on heart now, um, they do amazing work. Yeah, I have.
Speaker 2:I've never had a problem with y'all shout out, raise auto definitely raise auto Auto.
Speaker 1:Yes, yeah, their shops on Hartnell, uh, you know, just uh. Yeah, they're the best when it comes to windshows I've ever experienced. I've never had a problem with them since I've been dealing with them I want to say for the past 10 years oh my god it's.
Speaker 2:It's just so important to shop around and just shop around. That's why Amazon is killing it out here, because you can go to all your local stores and look at clothing or whatever, and then you like man, they sell this, selling this for 50 bucks, and you go to Amazon just to check the price.
Speaker 1:You it is, and they like oh, this is a 40 and it's prime again two days, yeah and yeah.
Speaker 1:so, knowing that and I'm what you said, cuz like I have a business account with Amazon but then, like sometimes I'll be like you know what I'll do the free shipping I don't need to wait this very second. I can wait about four or five days, it doesn't matter. But lately I'll tell you this the past couple days, even though I put down, yeah, just you know, I'll get that, you know, like a Saturday or next Sunday or next Monday. No, they've been speeding it up. Oh yeah, because I think what they is? They probably bored like.
Speaker 1:I have some stuff coming today. That stuff wasn't supposed to come until tomorrow they're wrapping up for the holidays. Yeah, I was like, well shoot. I mean they almost got some money on me if I had said yes, but I said no, I don't really need it that fast and it comes today and and they, and they give you incentives like if you don't want to rush it, you'll get, like you know, a dollar two dollars, offer, yeah, some credit.
Speaker 2:So that's pretty cool too. So like shop around and you know, depending on the price, the price is a huge thing, right, someone's doing cheap. Really I want to go there but, like you said, the quality of work, you know, the reputable, you don't want to go to some dingy place and they're like. They're like what the f you doing here? Yeah, that's how they greet the customers I see you have negative five stars. Yeah, I was like even if it's hundred dollars, oh, that's horrible exactly.
Speaker 1:That's all.
Speaker 2:That's why I'm doing so great because they, literally, they run out right, they run out with their white shirts. You know, they know right now, hey, how can I help you? Yeah, you know that's true okay, the other, my other shop will go to. You know, they're just like what? Do you want a tire? I need the tires, exactly right, oh man oh shoot, all right.
Speaker 1:Yeah, the next one is going to be not seeking professional help. So the mistake trying to handle everything on your own without consulting real estate professionals like agents, lawyers or mortgage advisors. Yeah, if you the thing is, when it comes to, as they were talking about agents, lawyers and advisors, they have, everybody has resources. It's just what resources do people have? Because you can get a lot of stuff online and everything. But there are certain things. Like people come to me They'll tell me like yeah, tony, they said my house on Zillow is that much. And I just laugh and I say you know that Zillow, what is it?
Speaker 2:Zillow.
Speaker 1:Zillow, as the estimates Zillow estimate is, it's not. It Like no. Like I'll go on the MLS and I'll find out from you know a mile or two mile radius of how much your homes have been selling and look at the comparables, Like that's, that's that homework right there. That that Zillow doesn't really. That doesn't really do. Like you get real in depth depending on the you know how far space, how far of an area and territory that you want to get. Yeah, so how to avoid? Says work with experienced professionals who territory that you want to get. So how to avoid it says work with experienced professionals who can guide you through the process, Negotiate on your behalf and ensure all the paperwork is in order.
Speaker 1:That's exactly when I work with clients. I tell them up front that I'm here to work for them. If there's any problems or concerns, they can call me, they can text me. That open line of communication is huge because there's a lot of people I mean, we live in this generation. Everything is either you know, I don't want to talk to you, I just want to text you. Even if that's the case, then you want to make sure that communication is open all the time, because having bad communication can ruin it, that client privilege.
Speaker 2:Yeah, all the transaction might be shot up because you guys can reach each other soon enough and someone else put a deal in and you're like, ah, I could have done that.
Speaker 1:So yeah, and even even if, like, like you know how we went down to Fairfield, even when you're dealing with anything of of of real estate investing, um, multifamily communication is key because you've got to stay on top of everything. It shows being professional, it shows the seriousness of you wanting, yeah, to pursue that property.
Speaker 2:Yeah, whatever your goal or initiative is, yeah, even even lawyers have lawyers right, so they can do it and everything too, yeah. But the only one I want to add was a man. Sometimes you can do it, you can, if you're smart enough and you have the wits of yourself, you can probably buy, sell a home and you can probably do all the paperwork and go to the bank and stuff like that. But man, I would easily pay for the convenience. Man, I don't want to be at work and answer these texts and get these phone calls on these mortgages and dealing with this and that man, I just want to be like hey, yo, tony, I want this house.
Speaker 2:Let me know what a sign everything.
Speaker 1:Do it from docu sign, that's it. I would I even like going to the point where I even know if the person doesn't really care or want to know, I'll tell them like, okay, this is what I've seen, this is what I've seen. I just want to give you this information. Either they can take it or they can it's. It's up to them, but at least I did my due diligence and they can be like you know what?
Speaker 2:he was on top of it yeah, there's, there's thousands of realtors out there, but the ones that will definitely separate themselves are the ones that are, you know, like personality. For me it'd be like, like I said, they all know how their stuff, they probably all know how to buy and sell a house and do all that stuff, that paperwork, but if their personality doesn't vibe with you, oh no, you're not gonna like.
Speaker 2:I say you're not be like this. Guy's the best wheelchair in the world, but he's like. Tony, I saw a house. You want to look at it, or what Exactly?
Speaker 1:Chemistry is all off dry Versus.
Speaker 2:You're like yo, man. I just saw this house. I think it'd be perfect for you and your wife. Man, I can be ready in 20 minutes to show you. Oh man, I'm going to go with this guy.
Speaker 1:Exactly, and the house is like you know, it's people's biggest investment. Yeah, I was just remembering that yesterday I was looking at it was a clip I'd seen in one of the medias and they were talking about the homes and they said basically that for a person to own a three-bedroom, two-bath house they didn't say the exact square footage, but they said just a standard home here in the United States a person needs to make at least $100,000.
Speaker 2:Yeah, I think I see something like that. I think it was $102,000, $103,000. Needs to make at least a hundred thousand dollars. Yeah, I think I see something like that. Like the the old lab.
Speaker 1:It was like I think it was a hundred and two hundred three thousand dollars and I was something that's crazy, something crazy like that, which is like uh, not a lot of people are breaking that 100k mark.
Speaker 2:No, no, no, exactly yeah everyone's gonna be renters and stuff, you know. But yeah, yeah, for sure you need. You need professional help.
Speaker 2:No one does it without a team no you might not have a team, team, right, like all of us know each other. But, man, if you really sit down and think about it, you have your doctor, you have your lawyer, you have a realtor, you have your mortgage company, you have all these. Uh, yeah, you know your phone company, all these companies, that's your team. Like you, you pick them, they pick you, you pick the one because they have the better quality product, it's cheaper or whatever it is. But you pick these people on there, your whole team in your life. Yeah, you know your spouse, that's your, that's your. You know that's your corner right there. You know that's your, that's your team. But picking the right team to help you get through whatever situation is is huge. You know, like I, I don't think I would ever, I don't, I would, I would never buy a house without a realtor. I don't have time for that. I don't know how. I don't have the knowledge you know.
Speaker 1:No, no, you're right. Yeah, and the last and least falling is failing to understand contracts and legal terms, the mistake signing contracts without fully understanding the terms or missing important details in the fine print oh, it's huge for me.
Speaker 2:Yeah, I know nothing. What is this?
Speaker 1:well, yeah, when somebody says, here, sign this, when somebody says to do that, like no, don't do that, you'd be like alright, what am I signing? Because you know buying real estate is a is one, is one of the biggest purchase. That could not be biggest purchase you'll purchase in your life.
Speaker 2:For sure, no one know the people of white houses, that sometimes some people that I know about us don't understand, like what, how big a person was, because like, oh, I'm not gonna pay a heart, I'm gonna pay two, three hundred dollars for a pair of shoes. Like that's crazy. Oh, my, I'm not gonna buy these, I'm not about to see. But then they'll go around and buy 200, 300k house yeah and make those money's payers every day.
Speaker 2:Knowing the interest rate and all that stuff, they there's just, oh yeah, spot houses like dude, you're complaining about these shoes that you really wanted to buy. Now you just went on hot suit. Yeah, you're never gonna pay it off. 30 years of paying off. You could have paid that you off in like a week is there.
Speaker 1:Yep, so you gotta know what you're doing, because, man, that's a lot of money right there, mm-hmm so how to avoid work with an experienced professionals who can guide you through excuse me the process and negotiate on your behalf? Yeah, to ensure all the paperwork is in order. Oh wait, I'm reading the wrong one. My fault, I'm way off. Yeah, it's a. Review the contracts carefully, it's almost the same. Yeah, you review the contracts carefully and, if needed, it's consulted real estate attorney to explain any of the legal terms that you don't understand. So, yeah, with these 10, which they are right there, I'm going to run a brief rundown.
Speaker 1:Skipping proper planning, financial planning, neglecting to research the market, overlooking location, failing to conduct a proper inspection, not considering long-term goals, letting emotions drive emotions Definitely don't let that. No, don't do that. Ignoring the impact of interest rates, understanding renovation costs, not seeking professional help, failing to understand contracts and legal terms. So, by avoiding all these mistakes, you'll be in a better position to make a smarter, informed decision on your first property purchase. And, like I said, you would definitely want to know if you do make mistakes. Make sure that you have somebody credible that can help you out. Like even before you do this, you know, have a blueprint of how you want to go about getting something.
Speaker 1:There's some people who just buy off a spike, but then, when it comes to real estate, it's a journey. It's a journey that you have to take your time to go about going to do it, and it can be definitely rewarding at the end, because you want to reap the benefits at the end too. That's what they talk about, what your long-term goals Be having a family, shopping centers, the location. A lot of factors play, especially with real estate investing. Yep, yeah, but yep, that's it for this one. Avoid these mistakes when buying your first property.
Speaker 2:You want to say anything else. Rock, Thanks for having me. I got my gear right here the professionalist baby.
Speaker 1:Yeah, I, I'm still debating if I want to start putting out the, the merch. You know me because I'm still working on and everything but um, I will say this that, uh, january and start of 2025, it's going to be very, very amazing, especially for the Professional Real Estate Investing Podcast. If you want to become a guest, you can email me at realestateinvestingattheprofessionalistinfo. I've had a lot of people hit me up lately that I'm getting ready for the year and I want to bring a lot of people on to get them out there get the word about real estate investing. It's actually fun learning a lot of stuff that you don't know about. So I'm not trying to make this stale for people, but I want them to be like hey, you know what? Maybe I should turn that route. I mean, because there's always different ways to invest. Stock market is always huge other different means you can.
Speaker 2:You can invest, and then they were perspectives to like we all want to invest in real estate, like pretty, like there's a like backgrounds we guys came from. What's your goal is all different, even though we're all doing the same thing. It's always different, yeah, and.
Speaker 1:I was cool in there and like. The one of the reasons why I even started this because you know we're we're almost hitting up on the 25 episodes is, um, when I heard the the two expressions you know, god's not making any more land and god's not making any more dirt like people need to live somewhere. Like that got my, that got my, my, uh, my marbles just thinking my brain, I'm like what? Like, yes, like why not? Like someone needs some. It's a need, any work, anything that has a need is always, you're always going to prosper. Yeah, you're always going to prosper. The rather than that, that's it. Everybody. Y'all have an amazing day. Me and rocky out of here. All right, peace.