Build Wealth with Real Estate (ft. Bryan Anderson)

What if the money you’re already spending on housing could become the starting point for building wealth? Real estate investor Brian Anderson argues that ordinary working families may have more options than they realize—and Rodd Duff pushes him to explain exactly how the numbers, financing, risks, renovations, and strategy work. On this episode of INsights & Straight Talk, Rodd Duff and Producer Barbie welcome Brian Anderson — “Brian the Real Estate Guy” — a real estate investor, licensed Realtor, mortgage loan originator, hard-money lender, and author of It’s Flipping Easy. Brian brings decades of experience in finance, fintech, lending, and business, along with firsthand experience purchasing, renovating, holding, and selling investment properties. This isn’t a conversation about becoming a real estate mogul overnight. It’s about financial literacy, homeownership, informed decision-making, and whether everyday people can convert one of their largest expenses into an asset-building strategy. Brian breaks down his “Live-In Flip” approach, renovation financing, down-payment assistance, seller concessions, distressed properties, house hacking, and ways buyers may be able to enter real estate without the massive cash reserves commonly associated with investing. Rodd approaches the discussion personally: Could this actually work for him—and could it work for other members of the Great Middle Class?

This has been an experience of amazement to me

Before you leave if you'd like to watch another

one of the podcast click the first link in the

description We love having you here. We appreciate

all your support and with that producer Barbie

and I Welcome everybody to another edition of

insights and straight talk I am Rod duck and

I'm gonna be right up front with you I have a

personal reason for being especially curious

about this conversation. Because when somebody

tells me that everyday people may be able to

start building wealth through real estate without

having a pile of cash in the bank, without having

wealthy investment partners, and without spending

thousands of dollars on some guru's You know

coaching program I want to know exactly I want

to know how that works And and I don't mean Theoretically

I want to understand I want to understand the

numbers. I want to understand the finance I want

to understand the risk And I want to know what

kind of property we should be looking for here

What somebody needs financially to get started?

What happens when renovation doesn't go according

to plan? And where's the biggest mistakes? Where

are those made? And Brian, I'm going to put you

on notice right now. I'm interested in potentially

using the system myself. I'm probably going to

approach this conversation a little different

than somebody who's simply curious about real

estate investing, okay? I want you to help me

understand almost as though I've walked into

your office and said, Brian, here's where I am.

Can this work for me? And you know what? I think

it's going to make this especially valuable for

everybody watching because There are probably

a whole lot of people listening right now who

have wondered that exact same thing My guest

is brian anderson brian the real estate guy brian

is a real estate investor, uh licensed realtor

mortgage loan, uh originator a hard money lender

And offer of it's flipping easy Love that title.

He's personally purchased, renovated, sold, and

held investment properties. But what really caught

my attention was something Brian calls live in

flip. Think about that for a second. Instead

of starting with the assumption that you need

to become some big time investor with multiple

retail properties, huge cash reserves, or outside

investors, Brian asked a much simpler question.

You're already spending money every month to

put a roof over your head, right? Is there a

way to make that money now start working for

you instead? That's where I became very curious

because we were just talking about this. Brian

has set himself a pretty remarkable goal. He

wants to help 500 families build wealth using

the money they're currently spending on rent.

Now, I know there are people listening who immediately

hear that and think, okay, what's the catch?

Good. You know, I want to know that too. What

does without big money actually need? How much

money do you really need? What kind of credit

score, what kind of credit do you need? What

kind of mortgage are we talking about here? What

do you find? How do you find the right property?

What does that look like? How much renovation

can a person realistically take off? What's a

live -in flip? versus house. What's the difference?

What does DSCR alone? When does that enter the

picture? When would that in? When does hard money

make sense? And when should somebody stay that

way? What happens if the market turns so many

things about how and maybe maybe here's one of

the most important. Who should not do this? Because

this show isn't about selling anybody a drink.

It's about understanding an opportunity well

enough to decide whether it makes sense in the

real world. And that's particularly important

when you're talking about the great middle class.

For most working families, their home is the

largest purchase they'll ever make. Housing is

one of their largest monthly expenses. And building

meaningful long -term wealth can feel increasingly

difficult, right? Think about that a lot. So

if there's a legitimate way to rethink that housing

expense, and potentially turn it into an asset,

building strategy, I want to understand. And

by the end of this conversation, Brian, I want

to be able to answer one very personal question.

Could I actually do this? So, Mr. Brian Anderson,

as I told you before, we're going to start the

beginning of the show a little bit. differently

um oh no hold on and all right uh basically what

i wanted i have a different way of putting this

but basically what i want to ask you to start

off before we go back to your journey is if i

was to what is what is the first thing i came

into you and said let's assume i know nothing

about your your your program And I sat down and

I said, this is where I'm at. What's the first

thing you're going to tell me to do? The first

thing I'm going to tell you to do is to look

at your housing expense. What are you spending

right now for principal interest tax, whatever,

if you're renting, how much is your rent money?

Because I want to help you get into a property

using only what you're actually currently paying

in rent. I don't want you to spend a dime more.

Wow. OK. This is gonna be a great conversation.

I just wanted to set that up. As I said before,

we'll get back into that and as the questions

come in, we'll probably get deeper. And one thing

I didn't, I don't think I mentioned, you didn't

text the green M &M's, right? What's that, I'm

sorry? You didn't text the green M &M's, right?

No, no green M &M's. Those are all Producer Barbie.

I know that. I know that rule. I know that rule.

Yeah, you're the man. It's gonna be a great show.

You know, we already have 300 people on. That's

amazing. That's fast. And by the way, folks,

I haven't even talked much about this. And we'll

get into your journey in a second. What's that

inflection point? What brought you onto the path

that brought you your journey here with us today?

But before that, you brought up something that

was interesting that I found fascinating. I did

not know. You're you we're talking uh producer

barbie is out in california and looks there now

and i'm from there and so so san diego is not

exactly a cheap place for the rent which is an

advantage or is it a cheap place to buy a house

right much less any southern well california

period right but talk to me about that you you

said something that fascinated me you said the

margins are better so it's it's actually the

same amount of work in a different market, but

the margins are so much larger that you see a

bigger return on investment. I'll give you two

quick examples. One of my examples, it's on my

website, 23586 Via Navarra and Mission Viejo.

I picked it up for 9 .42, put 35 grand into it,

sold it for 1 .36. That's a 388 ,000 dollar gross

margin. Then I went to Colorado Springs. My oldest

lives there in Colorado Springs. Picked up a

property for $480 ,000, put $30 ,000 to $35 ,000

into it, sold it for $610 ,000, made $100 ,000.

The amount of work was exactly the same. The

amount of time, effort, energy, exactly the same.

The difference, $388 ,000 versus $100 ,000. So

yeah, in a high price market, your holding costs,

your monthly expense, your rent is higher. So

someone can't walk out of Ohio tomorrow and expect

to pay what they're paying in rent in Ohio to

move into California. But any renter that's here

in California is paying somewhere between $3

,000 to $10 ,000 a month to live here. It's easy

to turn that into wealth. Yeah. All right. So

we're going to walk down that road, and we're

going to walk down all parts of it. Like I was

going to say, I don't think I mentioned this

to you, but I'll probably interrupt you. quite

often to debris, because you know terms that

are everyday to you, and I consider myself a

safety net. The audience, as I told you before,

is very, very intelligent, and they're here,

obviously, for a reason, because they're interested

in this. But I consider myself a safety net.

I understand what you're talking about, and they

definitely do. Just moving on what let's get

into the journey that that I like to fitness

show up with How did how did you kind of start

looking at real estate at investing and you know?

Obviously you started in the real estate business,

but how did where was that inflection point where

you're now approaching it through this? And what

you're wanting to accomplish and and I've never

heard anybody turn it around and saying and whatever

market you're in If you're paying the rental,

and I want to get where that bridge is. But how

did this start for you? How did you go down this

path? Why did you go down this path? That's a

great question. So I literally fell into this

thing because I had no other option. So I'd love

to tell you that I was well capitalized and I

had investors behind me and all that fun stuff.

I didn't. I didn't have any experience. So I

come from 30 years, three decades in working

in fintech and insure tech companies and C -suite

roles. So what I'm saying basically is I was

going to hire. Just for relevance, what are those

two techniques that we just used? Finance technology

and insurance technology. So companies that were

startups, for example, Landmark Home Warranty,

I was employee number nine, we turned it into

a $20 million a year business and it sold to

American Home Shield. Reliant Funding, we went

from $60 million a year to $90 million a year

gross and sold to LCF Financial. my history,

and I could go down a bunch more, but my history

was I would work with startups, I was in finance,

whether it's business capital lending, you know,

mortgage loan origination, I was a broker during

the implosion of 0708. So there was there's a

background there. And when COVID hit, Rod, it

was it was an aha moment for me as an epiphany.

So COVID hit I'm working in a C -suite role for

a company in La Jolla. I'm driving every day

from Oceanside. So it's an hour and a half commute

in each direction, right? The company shut down

because we were doing funding, business funding

for small businesses and a lot of flippers and

all that fun stuff. Well, everybody was on essential

in that moment. So literally shut down and I

sat there, you know, just looking at my wife

going, well, okay, what are we going to do? And

the aha moment, Rod, was that I had spent three

decades helping other people make money, and

I hadn't done it for myself. And so, like I said,

I wasn't well -capitalized. My back was up against

the wall. I got a remote job. And because I was

working from home and I saved three hours in

commute, I decided to take those hours and that

flexibility to move around and turn it into wealth.

Wow. And so what did that beginning to look like?

So the decision was, and you know what's some

of the greatest thing, well, a lot of the greatest

things in the world in life come from, I had

nowhere else to turn. When you said that statement.

It's like, that's when the human species, the

human brain, or you can either fight or flight

kind of sort of thing. The best examples of success

typically Now it's fine. Now. I've got to do

something I've got a my mind's got to be created

instead of panicking you You you look within

what is what was that first couple of things?

What what what was that? What was that? Give

me a picture of what those first I don't know

say this right days or years Yeah, so it was

funny the I'm sitting there in a condo on the

beach was one of those vacation rentals you know,

fully furnished long term spending five, I think

it was like $4 ,500 a month somewhere in that

ballpark range. And we my wife and I both got

remote jobs. And we decided that we wanted to,

you know, get closer to where she was going to

be working. She had to check into the office

once a week, but it was an Orange County. So

we decided to start looking for properties. And

this is at the time where people were paying

cash and they were outbidding each other and

spending like 100 grand over asking and everybody

yeah it was crazy time the interest rates were

2 .9 percent and you know what else on that people

were like hiring people to camp in line for like

new opening ones yeah so there was all sorts

of crazy stuff going on now real estate was it

was crazy go ahead it was nuts so so we're sitting

there going okay well we we were in a spot, right?

You know, we need to be a little bit closer and

we needed space. So I want you, I want to paint

a picture. The condo is an ocean side beachfront.

There's no air conditioning. My wife and I are

both going to work from home. There's no air

conditioning. We're used to leaving the house

during the day. So it's 80 degrees in the condo.

We could not possibly work from home in that

situation. So we had no choice, but we started

looking at homes that were at least three bedrooms.

We're empty nesters. So we didn't have kids,

dog, whatever. We just it was just the two of

us. We started looking at homes and we got outbid

by about, I don't know, after about 10 homes,

we were about to give up. And then I met one

real estate agent who, through my experience

that I did some hard money loans for him. He

said, you know, I can help you out. Let me go

and call up some FISBOs. And what I mean by that

is for sale by owner, FSBO. Let me call up some

FISBOs who've been on the market for a little

while. And he found a person who was up against

the wall as well. He already had a job transfer.

He was moving to Florida. His new home purchase.

He had a whole bunch of money down on it and

he didn't have time to do the remodels or the

repairs on its existing home. He thought he could

for sale by owner and so he was backed up against

the wall. The house was probably worth a million

dollars and the value it would be after it was

remodeled would probably be closer to one point.

15. Right. And so it needed just minor stuff.

It really did like he just didn't have time.

So my agent represented both buyer and seller,

we bought this house. It needed a range hood.

It needed your agent together about the house.

No, no, no, no, no, no. Okay. Okay. Okay. You

Okay, so you you bought the house. Got you right.

The one that your agent suggests. My agent found

the house and did what they in California dual

agents are allowed. So he represented the buyer

and the seller. And we got into the home, we

purchased the home. Now at the time, my wife

and I had saved up our entire lives, you know,

after raising families and everything else, we

spent our entire lives saving up about 150 grand

in our retirement plan. In hindsight, I would

have should have could have used a down payment

assistance program, but I didn't think I qualified.

Now I know better. But at that time, I pulled

that money out. and I put that at the down payment

on the house. What's the program you just mentioned?

So in California, every state has these, but

I'll just say in California alone, there are

over 300 down payment assistance programs that

you can qualify for, even if you earn up to 120

% of the area median income. for a family of

four, you could make about 150 ,000 a year and

still qualify for up to 22 % down payment and

another 4 % up to 10 grand in closing costs.

So I could have bought the house with nothing

out of my own pocket. I just didn't know that

existed. And that was after three decades being

in finance. I didn't know that. I didn't think

I qualified because I'd owned homes before, but

I hadn't had my name on title. I hadn't had my

name on title for at least three years. Well,

in United States, if you're not entitled for

at least three years, you re -qualify as a first

-time homebuyer. They even have programs where

you don't even have to be a first -time homebuyer.

GFSA, which is a group out here, it's government

funded, will pay up to 10 % of your down payment

with, and you don't have to be a first -time

homeowner. Again, it just goes off of the qualification

to very immediate income. So all of these things

that I was learning after the fact, but let's

go back to the house. I bought the house, We

put about 35 grand into it. I did my own painting

and landscaping. We hired contractors during

lunch breaks, you know, they'd come to the house

and give us bids and they'd work on them on the

weekend. But it didn't really need that much.

And when it came time to sell it, homes were

spiking in value, the rates were still low. We

decided for capital gains tax purposes to lower

how much we were going to pay in taxes to hold

the property for 12 months. And then we listed

on the 12 months for 1 .3. We had somebody come

in and buy it for 1 .36. But the monthly payment

was less than what I was paying for rent in that

beachfront condo. So I only had to use that.

If I would have known about these down payment

assistance programs back then, I wouldn't have

had to pay any money out of pocket. The payment

would have still been the same. But that was

my first deal. Now I'm armed with 388 ,000 gross.

I netted around $275 ,000. So that is my first

start. Now, once you actually have $275 ,000,

it makes it a little bit easier to buy the next

one and the next one and the next one and the

next one. But that first one, you know, had I

known again, I would advise everyone to look

into the down payment assistance programs in

your area because your bank There still are these

they may adjust or different programs and so

forth. But these things exist today. Yes. So

if you just go like Google or chat GPT and say

list all of the active down payment assistance

programs in my area, you will be blown away at

how much government money is going into these

programs to help first time homebuyers or even

second or third time homebuyers buy properties

with no money out of pocket, they'll pay your

down payment and your closing costs. All you

have to do is qualify. Each one has some certain

rules. Give some idea about that. What's qualifying

mean? Go ahead. Yeah, I mean, okay, so income

qualifications, for example, the San Diego County

down payment assistance program paid up. It's

all of what we're talking about. Sorry for interrupting

you, but I want to just dig a little deeper.

All of what we're talking about now is income

related qualifications, whatever that is. Okay,

go ahead. So depending upon the size of the family,

the income qualifications can can go up or down.

So there's more down payment assistance for someone

who has lower income. you know, so if you're

at 80 % or less, they're going to pay 22%. If

you're at 120%, they're going to pay 17%. So

if you're making $80 ,000 a year for a family

of four, they're going to pay 22 % of your down

payment and 10 grand towards closing. If yeah,

if you go to, for example, yeah, but and most

people aren't told about this. Why not? Why not?

I'll tell you why. And when I was a mortgage

broker, it's it's more work. And I wasn't, I

didn't take the class myself to be able to explain

it to my clients. And the banks are paying a

salary person, they want you to fit in a specific

box with your down payment because they're going

to turn around and sell the Fannie Mae and Freddie

Mac. So there are reasons why they don't show

them. But these programs exist. So what you're

alluding to here is they don't go down that lane

for a couple reasons. One, it just makes their

job a little more difficult or challenging or

busy or whatever. They don't know about them.

Sounds like you have a water spray going on in

the background. Oh, yeah. Sorry about that. Hold

on a second. Sorry about that. No worries. I've

actually got a plumber here right now working

on a pressure regulator. So yeah, it's all the

time. OK, well, good. Then do what you're doing.

Thanks, guys. They just left. All right. So now

I forgot where I was at there. Um, it's it's

all I know we're talking about it's all about

um The income relationship and obviously you've

got to qualify for the loan, but they're starting

all this because it's more Inconvenient for them.

So whatever the right word is but also It's harder

to sell those and we all know what we're talking

about They book all this stuff together and then

sell it to another freddy made or whatever those

those folks um The third one is because most

brokers, loan originators and bank lenders, they're

lazy. It takes work to actually research this

in order to explain it to your clients. They

don't want to do it. One thing I didn't talk

to you about when we're in the green room was

this is a mutual work effort. We work together

along the way. I put questions or comments up

the questions I like to read because I need change

them, you know add to them or something Sure,

I like the guests to read the comments sections.

So I'm gonna put a comment up and I want you

to read this from Clive right here Great show

great conversation. Yeah, I I told you our audience

members are really smart. What's okay? What's

that? Oh, you got this one? Okay, I get to read

the questions easy now easy All right So David

asked what's the what's the best I did we kind

of went into that? In my opening right in that

very opening of the show. What's the best first

step for someone with very little money? To to

enter real estate and this is I said the monologue

There's probably a lot of people asking this

these questions as I do I mean you live in this

world and And so you you you get to see a lot

of things and then you start doing a little bit

of research and then you go Hey, there's something

here I could do this and all of a sudden you

start to learn a lot more about things kind of

like this show, you know I just started learning

about that and you get interested and you start

digging in but We talked about this a little

bit. What is the first step? Like where do I

go? I know you said look at your finances and

you just gave an example of what the rent monies

are. How do you kind of go from zero to five?

You know, it's amazing. There's so many people

that are already at five. They just don't know

it. So my first thing, the first thing that I

would advise is get in contact with a mortgage

broker. not a bank lender go directly to a broker

that has access to like my brokerage equity smart

real estate services and equity smart home loans.

We have over 150 lenders in our network. Some

are wholesale, some are correspondent, some are

agency loans, meaning Fannie Mae, Freddie Mac.

So some of them we've negotiated an arrangement

with for them to pay us money on the back end

without having to charge it to the client. In

other words, they call it yield spread. If I

give David Darnell a loan at par rate, let's

say I give him a loan at 6 .2%, they're going

to pay me one point that David doesn't even need

to know about because I found the loan and sourced

it. When you have 150 lenders competing for my

business, they all want my business. I get hundreds

of emails every day from all of them. From those

lenders, some of them are sell directly to Fannie

Mae and Freddie Mac. These are your traditional

conventional loans. Some of them are non -qualified

mortgages or non -QM. Another jargon that a lot

of your listeners probably won't understand,

but it just means they can't sell it to the government.

They can't sell it to FHA, Fannie Mae, or Freddie

Mac. So these are private money. Because it's

a higher risk kind of thing? not necessarily

a higher risk, it just doesn't fit in their specific

model. So a traditional loan wants a W -2, two

pay stubs and two years on the job. They pull

your FICO score, your credit score, and they

look at your debt to income ratio. These are

all things that you all know about. A non QM

says, all right, some people out there, they

don't look so good on paper. So if you're a business

owner, you're an Uber driver, you are somebody

who works in construction, you're somebody who

gets tips. Well, that money doesn't reflect on

a W -2. And so we can look at I have lenders

that will give you a loan based on your personal

or business bank statements, your average deposits.

I got lenders who will look at a 1099. I got

a lender that will do asset utilization, meaning

that, you know, this retired couple came to me,

they're like in their late 60s, they just started

getting Social Security. And they only on paper

make $4 ,200 a month. Now they got $2 million

in savings, but they only on paper make $4 ,200.

And in California, you can't buy anything at

40 % of that income, right? You just can't so

you don't qualify. So what an asset utilization

loan does for non QM is they'll take, they will

take all of your money, and they will divide

it by 60 and say that's how we're going to qualify

your income for mortgage. So if you have half

a million dollars, Let's say $550 ,000. I think

you're going to come out with about $9 ,150 as

far as gross income because they're just going

to take your assets and turn that into income

to qualify. Now the government doesn't meet that.

That doesn't meet the government's guidelines,

but it's just another way to prove that income

is coming in. A lot of retired folks are selling

some of their mutual funds every month to pay

their bills. So there's a non QM opens up more.

freedom for people who aren't going to typically

fit with the bank. Most of my clients that I

do loans for, they got turned down at the bank.

They got turned down from other lenders. My first

piece, the first advice for David and all the

other folks that are asking the question is go

to a mortgage broker that has access to hundreds

of lenders in different loan programs. They can

do fix and flip loans. They can do hard money.

They can do DSCR and we'll get into all those.

They can do traditional loans, they can do non

QM, they can use your bank statements, they can

use your find the lender that can help you and

that person becomes your partner for life. Because

no matter what you do moving forward, they already

have your finances, they already know your situation,

they can help you get there. Whereas a bank teller

gets a salary and they could care less if you

get the loan or not either fit in a box or you

don't and that's all they care about. And that

first part of that ending of what you just said

is obviously important because Uh, you find somebody

that that works, you know, then that relationship

begins to build and it's like in anything else

Especially transactional, uh anything else That

relationship makes the transactions over time

better all the way around because You're you're

you're you're knowing each other I use ai a little

bit in this example these days because it's true

like agents get to know you So, as you're working

with an agent, you know, in this case, a person,

right, a human, and the other example of an algorithm

or whatever agents are, but that AI gets in the

way. Just like when you have a business partner,

the more you know each other and get that along,

the better those deals end up working. And probably,

on top of it, you get the opportunity of somebody

says, oh, you know what? He'd like this. and

would actually probably find more stuff that

because of that relationship as well. Well, it's

not just the relationship. My whole point that

I was trying to make is that 90 % of the people

who come to me and been turned down by a bank,

I can get them alone. Like it's it's crazy. They

just don't know percent. Yes, people. 90. That's

that's a big number. And it's because of these

other things that other people aren't... I don't

have enough down payment. My FICO score is only

a 580. My bank said no because of this reason

or that reason. My debt to income ratio is not...

Whatever the reason is, they come to me and I'm

like, well, that's because your bank can only

sell one of three type of loans. They can sell

a primary residence, traditional loan. They can

sell a conventional loan or they can sell a home

equity line of credit. They're done. I have hundreds

and hundreds of lenders all across the board.

Anyway, we'll... But it is shocking to me how

many people just don't believe it. I mean, my

sister, for example, she was adamant that she

could not get qualified. She went to a bank.

She went to another lender. They all said no.

And they said, Well, you don't have enough down

payment. I sent her to go get a down payment

assistant. She spent 90 minutes on an online

thing. It turned around and gave her $19 ,000

down payment assistant paid for by the government

to help her get into her house. Those sisters,

man, they're gonna pay attention to us brothers

a little bit more often every now and then. Yeah.

Well, she did though, it sounds like, but that's

fascinating. 90 % of the people that aren't,

and this is across the country, it's not just

California, obviously. We're talking to people

in Ohio here and as well as in Arkansas or Oklahoma

or wherever. That's a fascinating statistic.

How much savings should a beginner ideally have

before trying to live in flip? This is where

I want to get into this, because that concept

to me is very fascinating. What do you mean by

live in flip? In other words, just like you would

be moving into a home while you're rebuilding

it, then you flip it? Tell me what that looks

like. Live in flip. This is going to sound like

a controversial and even hard to believe answer.

But how much savings should a beginner ideally

have? I'm going to say how much does it take

to rent a U -Haul to move into that home? That's

how much you need. It's really crazy. So the

way that this works is with a combination of

stacking. I'll use this term to try to explain

that first layer is you get the mortgage loan,

right? Now mortgage loan is all right. So if

you're getting a a loan that I would advise for

somebody who needs to fix up a property. You

think the old school way, let's understand how

they work. So the traditional flipper can only

offer on a hard money loan, like 70 % of the

after repair value. So how much the house is

gonna be worth after it's fixed up, the lender

will only go 70 % minus the cost of remodeling

it. So that's why you're hearing about these

low ball offers. If a home's gonna be worth a

million when it's done. then a hard money lender

will only give you $700 ,000 total to buy it

and fix it and send it. So they have to bring

in a lot of money. Then the clock starts ticking

on day one, right? They've got two months of

fixing it up, and then it's on the market for

three months, it's vacant. Well, in California,

you're sitting on a million dollars, that hard

money cost is about $10 ,000 a month. So every

month that goes by, you lose 10 grand of the

profit on that deal. So that's why they have

to go 70 % max, as they expect the home is going

to sit on the market. for about three to six

months. So part of that is that cost. Now, if

you're doing what I'm suggesting, and this is

something that's going to blow your mind, these

loans exist, and nobody talks about it. There's

a Fannie Mae Homestyle and a Freddie Mac Choice

Renovation Loan. The Fannie Mae... Hold on, hold

on. Can I interrupt you for a sec? Well, I just

did interrupt you. Yeah, yeah. We have almost

a thousand people on the show right now. I haven't

had somebody, a thousand people on the show with

me. months. Well, this is a big deal. There's

a lot of people sitting on the sidelines going

what they just noticed that. Yeah, just under

1000 people go ahead with where you are. Oh my

god. So these two loans, these two loans are

designed and they're government subsidized or

supported, if you will. But there's actually

three based on your FICO score. If you have a

580 or better FICO score, you can get about a

96 .5 % loan with FHA 203K. Now, this is a single

loan. Is this anywhere in the country? Anywhere

in the US. Okay, go ahead. FHA 203K that will

actually pay. There's a standard and then there's

a smaller one. Nonetheless, they will pay one

loan to buy the property and under all the renovations.

And if you've never done one before, they will

appoint a HUD counselor to help you manage the

renovations. And if you close on the fifth of

the month, you're going to have 55 days worth

of interest built into your loan, it's called

per diem, that gives you enough time to have

the home completely remodeled before you even

move into the property. So you move into a property

that where the majority of the remodels already

done, you're walking into major equity. And then

over the next six months, maybe you do some painting

the next loan. is Fannie Mae Homestyle. Now Fannie

Mae Homestyle, if you have a 620, if you have

a 620 to about a 680, this is a great one. They'll

pay 97 % of the purchase, okay? And that one

loan is going to pay for the purchase and the

remodel expenses, okay? Then the Freddie Mac

Choice renovation, if you have over a 660 FICO,

They're going to pay 97%. Now, on top of that,

we're going to stack on a down payment assistance

program that's eligible on any of those loans.

It's a government subsidized program on a government

subsidized. I mean, you're basically literally

stack these other 97 % kind of thing. So now

you get 100 % loan to value, 100%, no money out

of pocket whatsoever. to move into a property

that is fully turnkey renovated before you even

move in on day one and you spend the next, you

know, six months because the loan is going to

get called due commission to the lender if you

if you pay it off within six months. So you need

to hold the property for about six months. If

you hold the property for about two years, then

you've satisfied the down payment assistance

program. There is no monthly payment on the down

payment assistance until you sell or refinance.

So I want to just make sure I start this over

as clear as I can. You go to a mortgage broker,

you qualify for FHA 203 K a Fannie Mae home style

or Freddie Mac choice renovation. You stack on

that a down payment assistance program that will

cover the down payment and closing costs. Then

the seller who is thrilled that you're there

will offer seller concessions to pay for any

additional costs that you might need as far as

even moving, right? So you're talking about stacking

an agency rehab loan, a down payment assistance

program, and seller concessions to make sure

that you're not coming in with any money out

of pocket. What do seller concessions look like?

Let's say that a seller concession, the federal

law, I think that you're only allowed like three

to six percent of the home value for seller concessions.

But let's put it this way. A hard money and traditional

flippers show up to these poor people. and say

the house will be worth a million later, it needs

100 ,000 in rehab. So I can only give you $600

,000 for your million dollar home. Okay, now

that's what happens every day in this country.

You show up. That's right. So they and they need

that margin because they have to pay for agent

fees, they have to pay for holding costs, they

have to pay for builders risk insurance, they

have to pay for all these things that that a

traditional homebuyer Yeah. But if you're a primary

residence, now you qualify for loans they can't

get. And you can offer up to 97 % of the after

-repair value all in one loan from FHA or Fannie

Mae or Freddie Mac. So you don't want to do that,

obviously, but you want to give more than what

the traditional flipper can do, right? So if

I know going into it that the traditional flipper

is only going to offer this poor guy $600 ,000,

and I go in and I offer him $650 ,000, but I

want him to pay $30 ,000 towards closing costs

or whatever I want him to pay it for, whatever

the maximum allowed amount is to pay all my closing

costs and whatever, moving expenses. He's still

going to make $50 ,000 more than if he accepted

the lowball offer from a flipper. Now, I get

the property and remember, I'm picking up the

property for $650 ,000. it needs 100 grand. So

I'm going to get a loan from Fannie Mae, Freddie

Mac or FHA for the total amount of the, you know,

the purchase and the rehab, which is $750 ,000.

Right? Yeah, there's still there's still a $250

,000 margin. I move into that thing. So I help

manage the contractors and get it done before

I move out of my rental or wherever I'm living

now because I got about 50 days. If you close

on the fifth or the 10th of the month. And that

standard on a traditional loan that they're going

to wait, you can have it built into those 55

days. Well, that's part of the closing costs.

I'm gonna have my seller pay for the holding

costs for those months that I'm having it remodeled

because he's gonna give me some seller concessions.

So basically I'm stacking a primary residence

rehab loan, a down payment assistance. that is

deferred interest, no payments until you either

sell or refinance. And in some cases, if you

stay in the home for over two years, then it's

forgiven. So there's a deferred interest, there's

a forgiven grant. So you can literally walk into

$250 ,000 in equity on day one. And over the

next six months, do some landscaping, watch what

the neighbors are doing, maybe dress it up a

little bit. But you've already done the major

remodel. I do the painting myself. because painting

is expensive. And I know that over the next six

months, I can paint, right? I can dig up some

trees, I can plant some bushes. So those are

things that I know how to do. So literally, I

have helped people get into a property with no

money out of pocket with as low as a 580 FICO

score. And if you've got a lower FICO score,

you're going to pay mortgage insurance premium,

which is about six months of your mortgage insurance

upfront, plus you have a PMI or a MIP monthly.

There's an insurance premium when you go over

80 % loan to value. Well, that's fine. That's

why you're asking the seller concessions. You're

paying the seller 50 ,000 more. He's going to

kick back 30 ,000. It's going to pay for all

those costs upfront. So I'm helping people get

into a property with nothing out of their own

pocket. using loans that are designed by our

government. These are literally funded by federal

and state programs for down payment assistance

with loan programs designed to help you get into

your house. There's even a website called Fannie

Mae First Look Home Path website that will only

allow primary residence buyers for the first

30 days. They won't even entertain an offer from

an investor for the first 30 days because they

want to encourage primary residence. Why is the

government doing all this? Because they understand

that homeownership leads to wealth, and that

wealth leads to less dependence on food stamps,

welfare, all these different things. Think about

it. If you're sitting on half a million dollars

in equity and you lose your job, you're not going

to get on welfare and food stamps. You can sell

and you can move around. So the government is

actually encouraging, you know, these type of

programs. Now, how many people have heard about

a a Freddie Mac choice renovation agency rehab

loan with a down payment assistance deferred

and seller concessions, nobody. And so when I

start talking the talk and I say, listen, it's

one thing in theory. Now there's a lot of coaches

out there that want to sell you a $30 ,000 program

to try to teach you how to invest like a flipper

and how to do it on a vacant and how you need

them and you don't need any of them. you can

buy a primary residence. And here's the best

part. Let's say the market changes. You got to

live somewhere anyway, right? You just stay living

in your house, paying your monthly payment instead

of rent. And when the market changes in your

favor, then you can sell. If you want to pay

less in taxes, hold the property for 12 months

or two years. Two years, the federal exclusion

goes down to zero. One year goes down to 20 %

instead of regular earned income. So I hope I'm

not talking too fast for your listeners, but

the idea is there are programs where you can

go buy a property and walk into hundreds of thousands

in equity, at least in California. Now that margin

is going to be smaller in other markets, but

you have to start somewhere. Start from what

you're currently paying in rent. Find a property

where the principal interest tax and insurance

is equal to or less than what you're currently

paying in rent. Look on Zillow or on your favorite

website where you're looking on the MLS. Don't

deal with wholesalers or off market. Like literally

look on the MLS and find properties that have

open houses that are distressed. Go into there

and talk to the agent that's at the open house.

They have their finger on the pulse of every

distressed property about to hit the market,

right? So you walk in and you start making friends

with real estate agents. then you let every single

one of those agents know if you can find me a

property I'll let you represent me both when

we buy it and then again when it's time to sell

it and they're looking at me with my pre -approval

letter thinking all right I'm gonna make 60 grand

off this guy now they're going to work that's

how you play it yeah and that's that's where

that that relationship starts because now you

say and when I'm going to sell it I know you're

a flipper That's a proper term, right? That's

not a disrespect term. Well, when you're a primary

residence buyer, you're not really a flipper

because that is a negative connotation. You're

actually buying as a primary, but with the intention

of selling it after you're done remodeling. And

I mean, the agents love that. They're going to

be able to list a turnkey property and get more

commission. Exactly. That was the point I was

getting. Then they get to stand in your open

house's turnkey and entertain. Who's coming into

open houses? Have you ever seen people bring

a real estate agent with them into an open house?

Once in a while, most of them are unrepresented

buyers that are thinking, I got to sell my place,

got to buy a new place. So that agent is using

you not only to make commission on finding the

deal, they're going to make commission. Yeah.

Oh, man. That's a beautiful evolutionary step,

your stepping process. Danny here. I'm curious

about as well um You know what makes a property

a good candidate for profit for a profitable

live -in Yeah Before you go that though um so

your program you're you're you're looking at

helping 500 families Yeah in this program Answer

this question, but before that kind of give me

an idea of like I said in the beginning I I don't

know anything about your program. Not only can

I do this, but what does it look like? First

of all, I'm not selling a program. Everybody

in the education, real estate education, you

know, the investor education business, it's a

multi billion dollar business that are just racking

people. I mean, if you look up FTC, you know,

scams, shutting down real estate investment scams,

there's I think they've 27 million just in the

last three years because people are getting fleeced

at the average of $10 ,000 per program. I'm not

selling a program. I don't want your email address.

It's not a lead into a sales funnel. I mean,

if somebody needs help finding property in Southern

California, I'm happy to help but I'm doing this

because of a commitment that I made when I first

started one of my early flips. I had a contractor.

Yeah, I was working on a property and he was

just like, man, this is so cool. I love what

you've done with this place and everything and

he was like, how did you get into flipping? And

I told him my live in flip strategy and he just

sat there aghast and he just was like, bro, you

people aren't gonna believe this is real. Like

you're gonna have you need to write a book and

teach people how to do this. And at the time,

I kind of laughed it off. And I said, Okay, yeah,

you know what, I'll tell you what, as soon as

I hit my number, and I told him my number, as

soon as I hit that number, and I don't have to

punch a clock anymore. I'll write a book and

I'll teach people I'll teach 500 people how to

do this. And I shook his hand. And that has been

driving me ever since. So again, I'm not selling

a program I do have a downloadable ebook for

10 bucks or you can buy the paperback for 20.

But that there's enough information in there

that you could literally just read through that

and you would be armed with everything you need

to do to meet the right people where to meet

them how to find a property that's a perfect

live in flip, you know how you want to build

your business without ever spending any money

out of your own pocket. I wish that somebody

would have given this to me when I first got

started, because even after I paid off the money

that we put, we drew money, my wife and I withdrew

money from our savings to put it as a down payment

on the house. And when I realized later that

I qualified our two new work from home jobs,

we definitely were at the hundred and twenty

percent. We could have totally gotten the entire

down payment and everything paid for. But when

I sold the house, I paid back the down payment

and I had about 275 ,000 net after paying agents

and everything else. But even that moment was

an aha moment because I saw that my agent was

making a ton of money. So I decided I'm going

to start getting my own real estate agent license

so I don't even have to deal with an agent taking

a piece of my action. And that's how I became

a real estate agent. Not to help anybody else

find a house, but just to increase the ROI on

my own deals. That's a I like using the word

ecosystem because yeah This show is kind of an

ecosystem. We have this live, right? And then

we do three sub stacks a week and I write that

Mangum star column and a couple other things

and that's an ecosystem because it's all kind

of Supporting it each other, right? Yeah, and

and what you just described it is it's literally

support and it not only that but it also gives

you an additional look or approach a different

way, you know, as an agent, your finance and

the agent looking for the home, you know, that's

a complete pie, not just slices of one, right?

My evolution as I went through it is I started

writing my own hard money, fix and flip loans

for myself. You can't write your own traditional

loan for yourself. You can't do that. You can't

do it even on a DSCR loan. So you still have

to have friends at the mortgage broker to do

that. But when I when I bought the house, now

that I'm a real estate agent, when I buy a house,

I actually part of my request and in the contract

is I get paid commission to buy my own house

because I represent that comes from the seller,

right? They would have to pay it anyway. So I'm

getting paid on day one, I'm getting somewhere

between 10 to $20 ,000 for one point to two points

on day one. as the agent. And I get paid on a

yield spread from the hard money lender. So I'm

making another point over here. So before I even

walk into the property, I'm putting 30 grand

in my pocket. Then when it's time to sell it,

I'm not going to pay an agent to buy the property.

I'm going to represent both the buyer and the

seller. So I have to host my own open houses

and everything else. But the idea is if somebody

walks into an open house and says, you know,

I got to sell my house before I can downsize

and buy this one. Now I'm going to represent

you selling your, you know what I mean? Like

there's a whole opportunity that just, it just

compounds over time. Yeah. So, so what, what,

I don't know if we, maybe we hit there and I'm

just not grasping it yet, but that, that live

in flip, what is that? What does the right property

look like? Something that you, you, you can live

in and you can stretch those numbers. And just

the 30 foot view, just to make sure I understand

the whole picture there. What does that look

like as you're doing it? What makes one property

better than the other is where I guess, where

I can maybe connect to it. So first take all

the emotion out of it and let's just look at

the numbers. When you go into like Zillow, you

type in certain keywords like distressed or.

equity or TLC or flippers. So real estate agents

are actually trying to get attention of these

flippers by putting attention real estate investors

attention flippers. This is a cosmetic remodel.

So you use keywords to find them. Then once you

find them, you need to find three recent comparable

homes. So three homes that are similar in size,

bedroom count, bathroom count, and square footage.

that have recently sold after being remodeled.

So you have a good number. So now you have within

a mile of your home. And this is what I did.

I found three other properties that were stunning.

They were after you know that my house that I

was buying was kind of a before. But these are

after right and so you see these homes that just

look beautiful and turnkey. This sold for $1

.1 million or $1 .2 million. And so you know

what that You know what that number is going

to be afterwards. Then you have to figure out

what the remodel costs are going to be. You don't

have to be a professional lender. You don't have

to take classes to learn how to do the loans.

You go find a partner that can help you do that.

Then you call up different contractors. You have

pictures on the MLS. You pick up the phone, you

call a contractor off of Google that has less

than 50 reviews, but they're all five star. And

you say, hey, I'm a flipper in the area and I'm

looking to purchase a property. But before we

do, I'm new to the area. and I wanted to get

a feel for what the cost would be to make house

A look like house B. So I actually have pictures

off the MLS of what one of the comparables look

like. I want to make my house look just like

that one. I don't need a designer or anything

else. I'm asking a contractor on the phone, how

much would it cost to make this house look like

this house? And then he gives me a ballpark figure

and says, you know, I need to go see the property

in person. But this a bit now they're looking

to make some money, right? So they're looking

to make some money. So then what I do is say

great Can you meet me at the open house on Saturday

and you do a walkthrough with them or if you

don't have you know If you have an agent you

have the agent meet you there if you're like

me and you're your own agent I show up at the

lockbox open it up and me and my contractor walk

the property But they're gonna give me a ballpark

up front of how much it's gonna cost to make

house a look like house B So if I know I can

buy the house for this price, it's gonna cost

this amount of money to remodel it And this is

how much is going to be left. I only look at

properties that leave me at least $100 ,000 after

paying all of my upfront cost and the remodel

cost and everything else. And I'm going to make,

I'm only going to pay monthly what I was paying

in rent before I moved there. So my wife and

I have had six different primary residence addresses

in the last five years. And that's okay. That's

not even all my property because I do buy other

properties now. But when I first got started,

I just bumped around I just started by bought

one I sold it the next one took only six months

sold it next one took seven months so the idea

is that you you have to be flexible and you can

find properties all in the same city and still

commute to work but it's really helpful if you're

in a spot where you know you can kind of you

choose homes from all over the area like we got

to experience Mission Viejo Huntington Beach

I mean we were just I graduated from Huntington

Beach High School. That's adorable. It's kind

of a Newport Beach life. And it's got a little

bit different vibe. It is. You're up there and

you've got an e -bike and you're doing live concerts

on the sand. So I'm experiencing life as well

while I'm doing it and it's fun. Now we're having

a good time. But when you first get started,

the idea is to find a distressed property somewhere

near your home that has enough margin. Now you

know what the professional flippers are going

to offer. You come in with a little bit more,

you stack, you get to walk in with equity. When

you sell the property, you know, you walk away

with all that cash. Now it's a matter of, well,

how, what am I going to do with this cash? And

now you have this insight where it's like, oh,

this is cash. Now it doesn't mean you have to

sell right away. Like I'm in a condo right now

that's beach front and ocean side, really close

to the place I was renting when this all started.

I picked it up for 1 .25. I put 30 grand into

it, just a refresh remodel. Had it reappraised

at 1 .415, which is 130 ,000 in forced equity.

I used that forced equity as a home equity line

of credit. And I used that to buy another home

at the Havens Country Club in Vista. That property

was an $860 ,000 purchase. I put 200 grand into

it. It's now worth 1 .25. I've got another 150

,000 over there. That one didn't sell right away,

I decided to keep it as a rental. So I have that

one as an investment property that I had to refinance

into a DSCR. So all these loans matter. In just

these two properties, I had a primary residence,

I had a home equity line of credit, I had a hard

money fix and flip, and that I use the HELOC

to fund. And then I have a DSCR, which only takes

into consideration rental income. So they didn't

have to pull my personal credit. they could care

how much money is coming in versus how much is

going out. If that number is greater, you can

get a loan without anything else. There's a lot

of different ways of skinning the cat, but the

idea is - You literally in a real rental property,

investment property, by the way, I'm glad to

re -ask that question about the live -in flip

because that's amazing. I'm sorry if I got off

track. No, not at all. I'm saying the opposite.

I like I like re asking questions sometimes because

we can we can kind of I like looking at a house

from different windows sometimes. And that that

that second, the first one was awesome. But now

I'm like, Oh, my, it just blew my mind. You get

to use your forced equity in your living flip

because it's a primary residence loan. You don't

get to put a HELOC behind a hard money loan.

So you get to use the equity in where you're

living to fund your next deal before you ever

move out of it. There's so many different ways

to play the game. But again, some people will

look at this book and they will say, I just want

to buy a primary residence. And they want to

walk in. On Amazon, by the way. Yeah, yeah. Yeah,

so it's on Amazon. But some people will want

to just learn how to buy a primary residence

using only what they're paying in rent with no

money down and they have lots of equity and they're

done. They're happy. That's all they wanted in

the first place. Other people will say, holy

cow, that was easy. I'm going to do this again.

And if you put your mind to it, within a few

years, you're done working. You quit your job

and this is your full time endeavor. And you

created enough wealth, like my wife and I, we

don't work anymore. We're literally living on

our savings from the money that we made from

these different living flips. Now, there are

a lot of guys out there, Rod, that try to sell

you on the idea of you can buy this property

in Ohio for $70 ,000, put a Section 8 renter

in it and have cash flow of $500 a month. And

I'm thinking, how many months have to go by to

get your $700 ,000 back? Well, even if you only

put 10 % down, I put 70 ,000 down. How many years

has to go by before you even get your money back?

I want to put nothing down, luck out with 100

grand in six months and go do it again. And I'm

teaching people if you're looking to be an investor,

it's a great way to start without coaches, without

cash, without partners, without all of this garbage.

And there are plenty of people that are out there

wanting to help you win as soon as you get over

your personal fear. My fear ended when my back

was up against the wall, but other people are

looking at this going, you know what? I am tired

of paying rent. What do I got to do? Sorry, I

was just looking over at the private chat, looking

at what contact information. I'd like to put

that contact information out there. I didn't

keep my promise. He ended sooner than I did,

so I didn't get back soon enough. I looked real

quick. It looked like it's your website. We're

not done talking, by the way. I just really fascinated

by this. Like I told you in the beginning, I

have my own personal reasons. I moved into a

small town of a different situation in San Diego.

I moved from Chicago. So, Barbie and I were in

Chicago. We spent 20 years together. She's still

a big part of the show. But she was having grandchildren.

They were in California. I was having grandchildren.

They were in Texas. So due to life circumstances,

it was a good situation. Good friends. Right.

And but I live in Mangum now. She lives in near

Temecula. I forgot the name of the town. But,

you know, not Marietta. That's a little I love

Marietta. It's W. Winston. OK, I don't know.

It's a little bit. It's a newer. It's a newer

part of that area. It's kind of like Lodera Ranch

for Mission Viejo. Yeah. Yeah. You know what

I mean? Yeah, I get it. I mean, there's a lot

of booby towns. I think it's called Winchester.

Yeah. Yeah. Okay. I know what you're talking

about now. It's near Temeculae. Thanks. Yeah.

I've never been there. But anyway, so I live

in Mangum and I've got the ability. bought a

property here and I paid cash for it. And now

I'm looking at a couple of other properties.

It's a smaller house, much smaller than I've

ever lived in. But because of the situation of

what I wanted to do, I'm buying the property

next to me that has a couple other houses and

all that property is a big amount of property.

And so I want to combine the houses. Is there

any way to kind of flip that kind of situation

where The numbers are much smaller in that part,

but as far as the loans, maybe I'm asking a silly

question, but I would like to see how I could

maneuver money in being able to acquire the property

next to me that eventually I want to be able

to put three houses in a row that's one house.

Does that make sense? I'm not a real estate guy,

so I'm using very... technical terms. Well, it's

really interesting. You can actually leverage

the land or the value or the home on one property

to get enough cash out. So there's a key loan

and there's a key lock. There's a couple of different

ways you can do it. There's new construction

loans, there's all kinds of ways to leverage

the land or the property to get the cash out

you want. And again, this is not something that

your bank does. But you go to a mortgage broker,

they have access to all of these different types

of programs. But yes, the answer is yes. If there

is equity, if there's cash available, then yes,

you can do it. And a lot of people don't know

that some of your listeners right now, I got

to tell you, they probably are living in, I would

say about half of California, 45 % is tenant

occupied of all of the homes in California. 55

% are tenant occupied is a rental phrase. Right.

So that means that 45 % all of the residential

properties in the entire state of California

are occupied by a renter, not an owner. 45 %

almost half. Almost half. And so yeah, now there

are certain areas like right here in town site,

down here in town site, ocean side beachfront

property, that number moves to 67 % tenant occupied.

It's huge. It's just Airbnb and short term and

long term mid term. And so these people are just

sitting on these. Yeah, I mean, you've got an

unobstructed view of the ocean. It's it's just

going to keep going up. The appreciation here

is staggering. So if you can afford to hold a

property here, it's crazy. But, you know, everybody's

got different ways to access equity. So those

of your listeners who are homeowners, okay, they're

like, you know, I own a home, I don't want to

move. I don't want to jump around and live in

your clip. What's what's in it for me? What can

I do? And that's where I teach people it's like,

let's access, let's tap the equity in your existing

property, get a home equity line of credit, and

use that for a fix and flip hard money loan.

Now, you've got some different rules there. It's

vacant, it's going to cost you, you need to have

more money in reserves, you're going to have

some different things. But the idea is that that

money is not doing a darn thing for you right

now, just sitting in equity. Why not use that

if you can create wealth? So and you're not limited

to just buying in your own market, you can buy

wherever you want. It really just comes down

to what your risk tolerance is. But you think

about it, it's one of the greatest hedges against

some volatility in the stock market, because

if the stock market drops 30%, your home didn't

drop 30%. If the dollar is weaker, it's going

to take more of them to buy my house. Either

way, it's a leverage against those risks. So,

you know, I always encourage folks who are looking

to retire faster. and they don't want to move

around, tap the equity that's in your property

to go and purchase some, you know, DSCR properties,

some properties that you can rent out for more

than what your payment is. And especially in

a market where appreciation is somewhere between

four to 14 percent, like here in Southern California.

It doesn't work too well right now in Florida.

But again, you're not limited to where you live.

You can buy a property anywhere. What do you

mean? It doesn't work too well in Florida because

it's more of a depressed. Yes. If you look at

the map, well, if you look at the map, so there's

several different maps to talk about appreciation

and depreciation of what home values, you know,

what that number looks like. So every market

is different, right? Every single market is different.

Right now in southern Florida, the value of properties

is not going up. In fact, some of the property

values are going down and that we're seeing that

happen in a lot of different markets. Well, in

other words, if you live in a market where it's

not appreciating in value, and you want to buy

some rental properties, it would only make sense

to buy those properties in areas where there

is consistent year over year appreciation. And

that's, again, you know, it works in some markets,

it does in another. You know, my wife comes from

Ohio, and a lot of her family members, what they

paid for their house 10 years ago, they maybe

have $20 ,000 in value more than what they paid

20. So it just depends on your market. But if

you're going to be a landlord, trying out loud,

buy something in an area that appreciates that

way you get cash flow, and you see a return on

investment. So let's say, in that city that you

just mentioned, let's say Winchester, their appreciation

is about 4 % annually, or at least it is in Murrieta.

Okay, so that's close enough. Right. So let's

take that number. Let's say 4 % appreciation.

Some guy that's sitting on 40 grand in cash says,

well, I'd rather invest that in the stock market

instead of putting it down payment on a house.

but they're paying $3 ,300 a month for rent.

So you take two people from the same place. One

of them puts $40 ,000 down on a home that's worth

400 grand that appreciates it 4 % annually. The

other one puts 40 ,000 in a stock market that

appreciates a 10 % compounding interest annually,

right? Who's going to have more money in 10 years?

Most people get this wrong, the home. So think

about leverage 4 % on a $400 ,000 home at the

end of year one. is $16 ,000 appreciation. 10

% on 40 ,000 is only 4 ,000 in appreciation.

And so a lot of these guys have this idea that

that their money is going to make more money

because they think well 10 % better than 4%,

right? No, it's about the leverage size of the

asset is what matters. So that's, that's what

I'm teaching people is how to rethink what they

were originally taught because there's so many

different ways to get out of working and punching

the clock sooner than later. You know, we've

been going well over an hour now. Sorry, guys.

No, no. I mean, it's just going by really fast.

I wanted to mention too, really quick on my website,

briantherealestateguy .com. I actually use pictures

of these properties that I just discussed where

I actually show before and afters. I use the

examples so you can actually see what I did to

them. And I think that a lot of people, you know,

have been taught things in theory. And a lot

of books are written about theories and ideas,

but not real world experience. I want to show

people these are real. These are my homes that

I purchased. These are actual homes. This can

be done. Yeah. And, you know, that's what I love

about the show is because it's about empowering

the great middle class when conversation at a

time. That's our catch. That's our catch. But

more than that, or deeper in that, is there's

a lot of information out there that, you know,

let's call it the elites, right? They have a

lot more money, a lot more access, nothing wrong

with that. There's nothing wrong with that. But

they just have access to that. And it becomes,

it just becomes easy to move things along. And

people in the, my audience, our audience, our

community here, We're in a world of, you know,

that's not readily free, easily sought out. Now,

ChatGPT is changing things, and it's easier to

search. I'll give you that. But this conversation

here is not something that nobody... This conversation

here is something that nobody... They have access

to it, but they don't know where, right? Exactly.

And that's why I love this show so much, because

this is huge. It is huge. One thing you said

a little bit ago, you said the government actually

wants you to have established wealth, you know,

because it lowers the risk. It's good for the

economy. It's good for the economy. It's great

for the economy. And actually, the original,

you know, the original Bill of Rights, it was,

you know, the freedom, you know, happily to live

happily, not going blank on what that term is.

But the original version, said uh land was included

in that wasn't happiness it was land the freedom

to be and because that's always been important

and you said it it's it's a difference in that

feeling that you're you're paying into an investment

or that investment actually in the way you're

taking in another lever is literally paying into

itself versus sitting on rent old property Which

almost half of it is in California, but you know

and just feeling like that money being thrown

away And I know that feeling I've rented before

and I bought and there's a different There's

a different kind of ease and calmness because

it doesn't feel like your money's coming in just

to go out Now it's coming in and it's huddling

for a while and maybe you've got what you see

nine grandkids I have grandchildren too. It's

eventually being passed through and hopefully.

Yep bringing the success of the family up overall.

Roy Drink has a great comment here. Would you

read this out loud, please? Really valuable information

for anyone thinking about buying their first

property. And he's just talking about the first

property, so obviously he's got something in

mind here. But you're talking about that continuous,

and then you're using that value on down the

line. We've got a number of questions about financing

side of things which you brought up. John Morris

here, Brian, what's the financing option you

would recommend for a complete, because you've

kind of broken down those, the broker has access,

you have access to several different programs

that work perfectly. Now this person's talking

about when they see complete beginner, I'm assuming

they're literally looking at this as a flip,

kind of as a You know a business versus just

being like you said about a half hour ago Uh,

you know, hey, I just want I just want to have

my home. I just want to buy my residence I want

it to be nice and and that's all and good I think

this person's that next level in the flipper

What what what financing option and I know it

depends on their their there's a lot of unanswered

here We don't know a lot about john, right? What's

his credit score? But can you talk to John about

this? If you're a W -2 employee with pay studs

and you can qualify for traditional, your FICO

is 580, you need an FHA 203K. If it's a 620,

you need a Fannie Mae homestyle. And if you have

over a 660, you need a Freddie Mac choice renovation.

You're going to get one of those loans and again,

stack a down payment assistance program. Look

online. I tell you what, Chat GPT is amazing

if you know what questions to ask. But there's

three right there, right? So so those are the

three main ones. Now, if you're an Uber driver,

and you don't qualify on paper, you're a business

owner, and your tax returns show that you've

lost money, even though you have plenty that's

coming in. Now you have to go the non QM or the

the non traditional route. And when you go non

QM or non traditional, you're not going to qualify

for these programs that actually give you one

loan to pay for the rehab cost and the purchase

price. you can still get loans, but you're not

going to get 100 % financing, you need to expect

that you're going to put 10 to 20 % down if you

can't prove your income. So John, if you are

W2 income, and your FICO scores over 660, any

Mac choice renovation all day all night, the

best rehab loan I've seen out there, and it doesn't

put any limitations, you can use that money to

put in a pool in the backyard if you want to.

Now, oh, I like that. Because that's, that's,

that's actually part of my plan. I lived, I grew

up in a lot of my life in Southern California

and pools are very relevant there. You fly over,

you fly over from the East, you fly over into

say LAX or Orange County Airport. What are you

passing most as you're looking down? Pool after

pool. I mean, they're living on the ocean. I

love that. It's actually gotten a little bit

different. It's gone away from pools and about

ADUs. There has been so much push for ADUs. About

what? What's an ADU? So it's an additional dwelling

unit. You can actually build in your backyard.

Oh, like a mother -in -law kind of house? Yeah,

that kind of thing. And so what's happening is

because you can rent, you can rent these for

so much money. It's ridiculous. So let me put

it to you this way. I had a client that was looking,

he was paying $4 ,700 a month up in Dictionary

Hill. And he's like, I can't afford to buy a

house. The house that's next to me is selling

for $1 million. I'd love to buy that. And I said,

you can buy it. and pay the same amount of money

you're paying for rent. He goes, how? And I said,

it's got a permitted ADU built in. It's owned

one bedroom, one bath, and everything. Those

rent for about $2 ,300 a month. And you actually

are allowed to use with these loans, you're allowed

to use 75 % of the projected rent for any of

those additional dwelling units. And so you could

literally qualify for the loan. And then with

that person's additional $2 ,300 a month coming

in, your payment after receiving rent is about

what you're paying for rent. Now you're controlling

a $1 million asset that's appreciating at 8%.

And so these are the kind of things that's like,

okay, well, what kind of loan is that? Well,

it's a little bit different. So you're not trying

to rehab that one, right? So you don't need to

get a remodel type loan. But if you're, if you're

going into, like if let's say you don't want

to remodel anything, most people don't know that

you can actually with no income, this is going

to blow your mind. First time homeowner, you

can buy a fourplex using the projected rents

of the other three units to qualify and purchase

the fourplex and live in one unit for free. You

can only do this once as a first time homeowner

or after you've not been on title for three years,

but that program is available for you. It's really

interesting how many different programs there

are. So ADUs, now when you fly over California,

Everybody's building duplexes and fourplexes

in their backyard and turning into accidental

landlords because the land value is so high and

the return on the rent is so high that you can

actually get the funding needed to build an ADU

or an additional dwelling unit, I'm sorry, but

to build it using only the projected rents of

what you're going to get when it's completed.

Wow. And I'm assuming, I love it when other shows

come on here. adventure show here. I'm assuming

that what you just said is the way to go here.

What financing option is usually best for someone

buying the first investment property? And that

sounds just like what you explained. Either the

four -plex or the ADU. That sounds like, especially

for somebody coming in new because You don't

have to build all those other assets you get

man These are so a lot of times what happens

is the income might not be enough to buy a million

dollar home But if it's got an ad you it's already

there you can buy a property and use a projected

rents of that and you move somebody in there

and You get to control a million dollar asset

while somebody else is helping you pay for your

mortgage now your home is actually creating income

Now I want to blow your mind when you're ready

to sell that property and you already have a

renter in place, investors will go hog wild because

now they've already got a renter in place in

the ADU. Now they just need to find a renter

for the main living space. So they're jumping

all over that because they have money coming

in on day one on an investment property. It's

crazy. That's kind of like back in the day when

my kids were just littler. We went through a

couple of periods where we had a much larger

house, so we'd rent a room out. That's that on

steroids at a whole other level. I never considered

that. I'm glad I brought up the little joke about

the pool, because that puts it in a whole different

perspective. Well, when some people think of

a house hack, they think about renting out just

the room, like an Airbnb kind of thing. But nobody

wants somebody in their house that you're living

in. but an ADU or a duplex or a triplex or a

fourplex and now you can qualify, you can take

your income and the projected income of that

one to qualify and purchase a property using

just the projected. Even if you don't financially

personally qualify for that big of a house, as

long as you get that rental offset, they're going

to use that money in order to qualify. I mean,

Fannie Mae even takes it a step further, they'll

use border income, they'll use people that are

not on title, like a grandma that's going to

be living with you and her social security check.

So the rules do not necessarily everybody thinks

well, you know, there's there's no way I can

get into a house. My rent is this buying a house

going to be a lot more money. Well, I'm going

to show you where to go find a home that already

has a permitted ADU so you can qualify and walk

into a home. You can live in the smaller one

and rent the bigger one out or or vice versa.

But you know, it's it's interesting that Fallbrook

because of all of the wedding venues and wineries

that are out there. Oh, did you say Fallbrook?

Yeah. So in Fallbrook, I love it. So it is Airbnb

friendly, meaning that you can go into air DNA,

plug in an address, the website is www .airdna

.com. You don't need to pay a membership. But

this is what lenders use you plug in an address,

it'll tell you what the projected income of that

property will be. And you can use that to qualify

to buy it. So I've got one client who actually

is ready to buy a it's a smaller home. It's on

an acre and a half. So the smaller home is just

as you enter in. And then the bigger home with

the pool is over here. Well, 70 percent of the

year it's rented. The other 30 percent he gets

the whole place himself. He lives in a smaller

one. And after receiving money from the Airbnb

renters that pay all up front, his monthly payment

is like eight hundred dollars a month. for the

whole thing and he's controlling the effort.

In Fallbrook. Now the home is appreciating in

Fallbrook about six or seven percent. So he's

living in the ADU. He's renting out the Airbnb

as the host and he does his own cleaning and

his own management and his own website. So I

mean it's all just butter. Wow. What a great,

what a great lifestyle. Yeah. On top of it. Now

I told you normally, oh it's another show. I

didn't notice that. Anyway. This is we've kind

of talked about this a little bit and I talked

to other guests about this and while they're

here because they That's amazing almost an hour

and a half because they're here for The information

that they they want to learn but it's still their

time So I like to at least read even if there's

some similarities to what we've already talked

about so the James show here and I told you I'd

like I like the guests to read the comments and

for me to read the questions. This is a combination.

So I'm going to have you read this whole thing

out loud and then go after the question. Great

discussion so far. What should a first -time

buyer focus on most when searching for their

first property? This is really important. Only

10 % of the US population stays in the first

home that they bought for the rest of their lives.

The average person, according to the National

Association of Realtors, only stays in their

home for 10 and a half years. Life happens, people

move. Instead of trying to buy your forever home

or what appeals to you personally or what you

want or what you like, I want you to think of

this as an investment, not where you hang your

hat. This is a temporary place to hang your hat.

But this is an investment, you can't live in

your stock portfolio, but you can live in your

primary residence investment property. And that's

where I want you to go. So the first thing to

do is say, okay, where am I going to go? So in

the world of investing real estate, I will tell

you the number one thing is location, you can

do an amazing remodel in a crappy location. Or

you can do a mediocre remodel in a great location,

the mediocre remodel is going to do better. So

find a place, A, that you wouldn't mind living,

like one of my properties is Oceanfront, the

other one has an unobstructed view of the golf

course, you know, and that I could go through

all the list of them. Good schools, you're looking

for areas that are going to be easy to sell.

The first way to do it is look for days on market.

Find an area, you find a distressed property,

look at the comparables and see how long did

it take them after they listed the property to

sell it. If it takes six months or eight months

or nine months to sell, even if it got the number

that you want, and then another area takes only

two months to sell, think of it as the amount

of demand. So think of supply and demand of,

okay, a lot of people want to live close to this

area. A lot of people like this school district.

A lot of people want to buy this, and I'm going

to spend less time in there so I can sell it

whenever I want to. But what I look for is equity.

I look for location. So if I find a distressed

property, I find three comps that and I'm sorry,

comps comparable, recent sold properties that

after they remodel within about a mile radius,

I want to find three other properties that sold

recently and find that one distressed property.

And so I'm going to look at that. And I'm going

to say, okay, these other properties, I know

how much is going to cost to rehab. And I know

how fast it's going to sell when I'm done remodeling

it. So I walk in and I look for those two things,

location and equity, knowing that this is an

investment. You put as much effort into this

as you would investing your moonshot on Nvidia.

You know what I mean? Like you spend hours in

front of a computer trying to figure out where

to invest your stock portfolio. All you have

to do is follow the process. And I laid it out

in the book and I have time to do it right now.

But if you follow the process of here's how to

find them. You've got a couple of different options

you can a spend all your time online looking

yourself knowing that there's going to be a lot

of competition or b My favorite every weekend

for the next month find every distressed property

in your area go to the open house Connect with

the realtor let them know that you're looking

for uh, uh live in cosmetic flip You want at

least x amount of money and equity after it's

remodeled uh, and you're willing to you know,

you're willing to close fast and all these fun

things, and here's your letter of approval, you

know, your pre qualification, then that agent

is now motivated. So once you imagine, okay,

we're living in a million dollar home average

area. If I go talk to an agent at a at an open

house, right, they've got tons of time, they're

sitting there waiting. And I walk in and say,

Hey, you know, I don't know if this one's gonna

work out for me, the margins kind of tight. But

what I'm looking for is this. I want to get a

three bedroom, two bath, single story, whatever

it is that you're looking for for that area for

what sells. Now in my market, the average buyer,

and this is nationwide, I think is the same.

The average buyer is a Gen X or a baby boomer

or a senior. The millennials only make up about

20 % of the buyers. Well, what do these aging

agent place buyers want? They want single story.

They want single living. They want a first floor

master. So if you buy a two story and all the

bedrooms are upstairs, probably going to be harder

to sell to that age demographic. So know your

buyer, know your location. You go to these open

houses and say, this is what I'm looking for.

And again, my book lays it all out, but you tell

them what you're looking for and do this to a

lot of agents. Then when that agent tries to

sign you up for an exclusive buyer agent contract,

you say, no, no, I'm happy to do a property specific

contract. So any property that you bring to me

that works, I'll let you represent me now and

I'll let you represent me on the flip. That allows

you to not be stuck with one agent, you now have

40 agents looking for homes for you. Trust me

when I say your email will blow up and you'll

have you'll get to cherry pick without having

to do all that hard work. Well, you said it earlier,

you said you get 100, whatever the number you

said, 100 and some odd emails every day from

these different folks. And it's like, you know,

it's like leads, right? Business, like I come

from sales. And you can't produce an ending unless

you have leads, right? In this case, the leads

are houses. And you've got these agents, these

real estate folks that are out there working

for you for free because they know there's a

commission, right? And at the end of the day,

they're running their own business. And that's

bringing leads like crazy. Now, I think we, I

know we've already talked about this. I'll write

Drake, he had a question earlier. I think he

actually made that comment and then a question

that you read. But how do you estimate, and this

I think you answered in that you pull up the

Zillow. You say, this is what I want it to look

like. This is what it looks like now. Can you

give me a ballpark? Okay, I need to look at a

little bit. Then you get to do the walkthrough.

with the contractor to give you an idea. Is that

the best way to answer this question? That's

the best way to get started. So for example,

if you go and ask a roofer how much it's going

to cost to do a roof, well, that depends on if

it's a shingled roof or if it's a cement roof.

So you don't get all the answers right up front.

What I'm saying is you take the contractor the

first few times and then you start to build a

spreadsheet. What I mean by a spreadsheet is

this. There is a three different types of remodels.

There is a refresh, which basically means lipstick

on a pig, make it look nice and pretty. But the

comps, the comps didn't have brand new cabinets,

they just painted them. Why would you buy brand

new cabinets? You do not want to overspend, you'll

never recoup your ROI. So you overspend beyond

the area. Yeah, you don't want to spend too much.

Right. So you're just trying to make your your

subject property look like the other comparable

property that you're trying. Okay, so if they

use granite countertops, and you need to get

a bid for granite countertops. Now what you're

going to find is after doing this a few times,

you've got a contractor in your back pocket that

wants to work for you. Okay, I know I got I can

call up Ernie Solis right now from No Limit Remodeling.

They got another property, check it out, shoot

him an email and within an hour, he'll give me

a quote. Because we work together. Well, no,

I don't. Right. Now the other part of it is this

I've learned in my market. that a refresh remodel

is about $50 a square foot. A mid grade remodel

is about $75 a square foot. And a high end luxury

remodel is more like about $150 per square foot.

So I've already double that. Okay. Now, how did

I figure that out? I built a spreadsheet and

I said, Okay, here's all of these different,

you know, here's the past conversations I've

had with contractors, I'm starting to figure

out now. how much the average he gives me per

square foot based on whether it is a refresh,

if it's a mid -grade, or if it is a luxury room

offer. Is this in your book? Yes. By chance?

Yes, it is. Okay. Go on, go on, please. Yes.

Yeah. Wow. But that really makes it simple for

me to go in. Now I know I look at a property

and it's a 1 ,574 square feet with a shingle

roof. I can do that pretty close almost to the

level of accuracy that my contractor can because

I've done it enough times that I know a mid grade

remodel. Now that could change a little bit like

LVP flooring versus the tile flooring, you know,

is a little bit price different. But at the end

of the day, you're going to be able to say, okay,

here's my three different spreadsheet headers,

you know, and here's how much it costs for each,

you know, for a kitchen remodel that is a mid

grade, this is how much it costs. And I already

know that number. So it makes it really simple

to do a quick evaluation. And again, this is

all information that's in the book, you can find

it pretty pretty easily to build a format for

yourself that doesn't take a lot of effort and

a lot of work. Or you can do the simple route

and just call up your buddy at your last contractor

and say, hey, man, here's the address of the

subject property I'm going to bid on. Here is

the comp, the model match down the street that

sold for 1 .3. Can you tell me how much it's

going to cost to make this one, that one? He'll

look at it and say, okay, this cement tile, you

can see the mortar starting to fade away. This

is either going to be a relay or a replace. a

relay is 20 ,000, a replace is 40 ,000. He just

starts going down the numbers. I want to make

my home look like that one. So don't over invest,

don't spend just because you like, you know,

a high end stove. Don't buy a high end stove

if your goal is to turn around and sell it. You

won't recoup your money. You know what I mean?

If your contract has KitchenAid appliances, buy

KitchenAid appliances. Yeah, that's interesting.

You're saying that because... I'm going to get

to this question, but I'm going to set it up

because, you know, you mentioned don't buy the

house that you're, when you buy the house, realize

that you're not going to be resting your hat.

In other words, average is 10 years. You've got

to look at, you've got to frame what you're looking

to do here. And my immediate response, because

of what I grew up in, you know marble uh tops

and you know red tops and nice bathrooms and

wolfs uh gas stove ranges you know that that

name brand kind of stuff that's not gonna that

that that how can someone avoid over renovating

yeah and hurting their return on investment sounds

like somebody was thinking a lot like i was thinking

when you know yeah how do you how do you do that

i mean the numbers what you just talked about

you were leading right in when this question

came in One of the reasons that I did the book

in full color is because I actually wanted people

who are reading it to see pictures. There's a

lot of pictures in there of exactly what the

property. So I use a subject property and three

different comp properties so you can see which

one had a refresher model, which one are high

-end and so on and so forth. But you never want

to overspend for the specific type of home. If

the comps you're using, if the three other recent

homes that were remodeled all had LVP flooring,

don't put in solid wood floors. You're crazy.

You're never going to get your money back. Just

because you think it's nicer doesn't mean that

your buyer is going to spend more money for it.

There's kind of a cap for every neighborhood.

And that's what you want to do is make sure you're

not overspending. You also don't want to underspend.

So if your comps have granted countertops and

you go to Home Depot and press forward, that's

just as hard. Yeah, I mean, you do not want to

overspend or underspend. And you don't have to

think. You don't have to be a designer. You just

show your contractor, this is what the house

looks like now. This is what I want it to look

like. How much? It's so simple. You're making

this too easy, man. That's the point. Way, way

too easy. And it's way too realistic. And I'm

obviously being simple. facetious and both those

things. But it's very realistic to be able to

picture. And I've looked at the book. We can

kind of concentrate. I mean, when you have Rod,

when you have when you do it once, maybe you're

lucky you do it twice. Okay, he's on a roll.

But you've done it many times. I have like this

system works. And so like I said, keeping a promise.

I'm not selling anything except for the book.

I'm not trying to get a lead in or a sales funnel.

I really want to help 500 families get off the

sidelines. and make decisions. Don't wait around

for the interest rates to drop and all this other

fun stuff. In fact, in California, the last time

that happened when the rates dropped, people

were having bidding wars, they spent 100 ,000

over asking. And you know, it's crazy as they

would have had the exact same monthly payment

at the higher interest rate two or three years

before when they bought the house for 100 grand

less. Buy when the interest rates are high, hold

it and sell it when the interest rates drop.

You wouldn't even have to remodel in a lot of

cases. What happens is when the rates drop, thousands

of people come off the sideline. Demand increases.

Now all of a sudden, you got a bidding war. So

now being a live -in flip, you have all the power

because you can wait out a downturn. You have

to live somewhere anyway. You can wait it out

until the market shifts in your favor. That's

like protection upon protection. Yeah. Because

you're using the word waited out because that

live -in flip just changes stuff. We've got a

couple more questions here. OK, yeah, let's wrap

through them. I know we're into this a little

time, so go for it. Yeah, no, no, no. So Dixon

here says, man, what I mean by that is, I'm going

to want you to leave the audience here after

a bit to what do you want to leave with them

as a final thought. And you know what? I would

like to do a next show. I'd like to keep it coming.

Yeah, let's do it. and do another show here but

uh uh when this when this hard money we haven't

talked about this year yeah um when does hard

money make sense for a new investor and i don't

know how i he's obviously a little further along

than i am i'm not a dumb guy but i know a lot

of i know a little about a lot of different things

that's why it's my wheelhouse so when he's talking

about hard money here making sense for a new

investor. Does that match up? Does that question

match up? Is that a fair question? Pretty much.

A hard money, you need to have reserves. In order

to even qualify, I want to see six months worth

of reserves. You have to put 10 % down on the

purchase price. They'll fund 90 % of the purchase.

Back up a little bit. What does hard money mean?

Hard money means that it's not... This is private

money. What I mean by that is... Private money.

Short term less than usually it's six to 18 months.

Most of them are 12 months lengths. That means

you're going to borrow X amount of money and

you have to pay it back within that 12 month

period. At the end of that 12 month period, if

you don't pay it off, they can take your house.

Now, this is usually done in the name of an LLC.

It's not primary residence at all. You need to

open an LLC. You need six months worth of reserves.

And what I mean reserves is all of the costs

of holding costs, principal interest. taxes,

insurance, associate, everything. You need six

months to even qualify plus 10 % down to the

purchase price. And then on top of all of that,

you need float money. Float money means that

in their world, you have to front the money for

renovation, you can get up to 11 draws, I'll

use Kiabi, one of my favorite hard money lenders,

KIABI. You can go directly to them and pay the

same points as if you came to me. But if you

want to check it out, the average interest rate

is around 10 .45%. 10 .45%. That's hard money.

Don't confuse this with DSCR. We'll get into

that. But the you're also going to pay one or

two points. And that is 1 % or 2 % of the entire

loan amount that you're borrowing upfront. Because

unlike a long term traditional lender, they only

make their money in a very, very, very short

window. Why would you do that? Why would you

use hard money? What's the advantage? The only

reason you would do that. Because it sounds like

so harder than everything else. That is what

the real estate investing coaching programs are

trying to do is scare you into it's really hard,

you need help, you need partners and you do if

you're using hard money. After you've earned

enough money, okay, after you have enough money

in your bank account to do a hard money loan,

you'll want to have big reserves. a lot of down

payment money. Why would you do it if you're

in a home like I am right now? I'm in a condo.

My wife and I love being at the beach. We didn't

want to move into the next one. We don't want

to sell this one. This one's appreciating so

fast. It would be crazy. It's now worth 1 .525.

I bought it for 1 .25 about a year and a half

ago. But I don't want to leave it, right? I'm

now hold on to this property. The property that

I purchased, I found the deal because one of

my networked agents said, hey, man, I found this

property. Check this out. It was Something that

would qualify for a hard money loan. Now I have

plenty of reserves to be able to front the money

So I put a hundred grand into it from the HELOC,

right? Home equity line of credit. I put a hundred

grand into it And then I had it remodeled and

it was vacant. Okay, I'm gonna tell you this

is scary at this point I'm gonna just be blunt.

I wanted to sell it. It didn't move I'm holding

it for six months each month that goes by It's

$10 ,000 is my holding cost. $10 ,000 a month,

so $60 ,000 out the window. Now, I would never

encourage a brand new investor to do this because

if you have to transition from a hard money loan

to put a renter in there, like I had to, then

you have to qualify for what's called a DSCR

loan or a debt service coverage ratio. And I

want to talk about you said we're gonna get into

that. Yeah, now it's a good time Talk to me about

this. So debt service coverage ratio is just

a very creative way The simplest explanation

is it measure it's a measurement to whether or

not the the property cash flows positively or

negatively In other words, if you can only rent

the place for $5 ,000 a month then that means

the maximum payments you have with principal

interest tax insurance Association can only be

five thousand a month It has to be a 1 .0 or

higher. Now, they do have some that are lower

called, you know, non there. They don't cash

flow very well, but you have to have even more

reserves in order to have that to make sure that

they can use your assets and say, well, the rent's

not enough to pay this monthly payment. Even

with the renter in there, you're going to have

to come up with a subsidy of maybe $2 ,000 a

month. Does this person who's getting that loan,

do they have enough assets? And so sometimes

you have enough equity in the property. Most

people don't know this, but if you're a real

estate agent and you lower the price, then when

you go to try to refinance it to a DSCR, they'll

only use not the appraised value, but the price

that you couldn't sell it at. So as low as you

dropped it, they'll only go up to about 70 to

80 % of that loan to value. So now you got to

bring even more money back to closing. So hard

money is very, very risky. And I would encourage

only people who have done this many, many times

to have a lot of confidence and have a way out.

Now, I was a real estate agent, I have an edge

because if I'm selling a property, I don't have

to pay agent fees. So you got 10 ,000 a month

going out and holding costs. Now you got to pay

If you pay five points on a million dollar home

in California, that's $50 ,000 you're gonna lose

just to real estate agents. So the list just

goes on and on and on and on. So six, seven months

go by and you can't rent a place out. I've helped

a lot of different, you know, people that were

accidental landlords, flippers that couldn't

unload a property in time. They're all scrambling

to get a DSCR loan and some of them didn't qualify.

They didn't have enough reserves for the DSCR.

They didn't have enough down payment. So they

lost the house. The hard money lender took it.

Now you're in LLC, so there's no foreclosure

process. There is no eviction process. It's a

business, so they don't foreclose. They just

take the house. They now own that house. So with

that in mind, I would never encourage anyone

to do hard money unless you are so confident

you can A, you unload it quickly, or B, as a

backup plan, you better have enough money to

be able to refinance this into a DSCR loan and

put a renter in place. And renters are never

100%. They can lose their jobs, they can get

divorced, they can go through whatever they're

going to go through. Plus, they might do damage

to the house. They could be a real pain in the

ass sometimes. You never know. This is why living

in your flip, it just makes so much sense. You

just don't have to deal as a landlord. You don't

have to pay property management fees. You don't

have holding costs because your rent is your

holding costs. You're literally exchanging what

you're currently paying for rent. to live in

your flip. So even if the market changes, even

if things go sideways, what the worst that can

happen is let's say your air conditioning goes

out and you've got to pay for an air conditioning.

Well, when you when you get a new appraisal on

your property, you might have a first mortgage.

But just like this condo that I'm in right now,

the forced equity after I did the remodel, all

of a sudden, it's worth more money. I need an

AC, no problem. I just go to the bank at home

equity line of credit, buy a new AC. you get

so much leverage when you live in your flip versus

a vacant flip. And that's why if you're able

to and willing to move around, you can literally

make enough money that you can retire in a matter

of five to 10 years as opposed to punch in a

clock. And that's exactly what my wife and I

did. That is huge. That is such a realistic approach.

Yeah. Whether you want to be, as I said in the

beginning, a real estate mogul, you know, and

have like you have multiple properties, but that

protection of living in your flip. If there's

a turn, if there's that, all you're doing is

doing what you would do if you didn't own the

place. You were still renting it. Like you said,

you can use the leverage to actually pay for

whatever it is that you may need. Now, This,

it looks like everybody's kind of winding down

here. We still got a lot of people on, but the

questions are kind of winding down here a little

bit. So I'm gonna ask you, as I mentioned before,

Richard, Richard, Rich, Rich, Rich Ensign. I'm

gonna ask you to read this out loud and then,

I like this question about how we're ending this.

Talking about back to the real estate thing,

because I think this is an important question.

Uh, there's shortcuts and then there's cutting

corners and those are two different things Bad

and good, right? So I want you to read this and

then and then out loud and then and then respond

to it and then and then go into What you want

to leave everybody here is a final What do you

want to leave your thousand? My god your thousand.

No, I shouldn't say that. It's a really it's

a topic that people need Yes, and because home

ownership is You know, they say that this generation,

my kids' generation, probably your kids' too.

I don't know how old you are, but my kids are

right in that 48 -year -old age range. But that

generation is gonna be the first generation since

the Great Depression that haven't lived, that

have a lesser lifestyle than their parents, meaning

it's really hard to buy homes now. That's the

thing going on, especially California. stuff

because of the cost of living there. But it's

not. It's not. With a house hack or a live in

flip, you can change the game. Yeah. And so Richens,

what I would read is really enjoying the live

conversation, how important is having a strong

local realtor when searching for investment properties.

So I will tell you that I actually dedicated

my book to my first real estate agent. His name

is Deon Stahl, a Stahlberg, and he's in Mission

Viejo. And he was instrumental in finding that

for sale by owner. you'll find that if you go

to these open houses of distressed properties

and you connect with each one of these real estate

agents and tell them what you're looking for,

and they know they get to represent you to buy

a property that's distressed, they can usually

attack a for sale by owner person who also doesn't

have representation and cut a deal where they

can walk into a lot of money to represent you.

So they'll start hunting for deals for you. And

so the idea is not to have one strong local realtor.

is to have like 40 of them. Every open house

go in. Yes, they're working for free for you

because the seller is going to pay them to hunt

for homes for you to buy. And so there will come

a point in your career where you decide to become

your own real estate agent because you start

to see how good it is to actually keep that piece

of the pie that you were giving away. But what

I would suggest is in the beginning, Go to as

many open houses as you can for distressed properties.

These people that are hunting for homes are typically

trying to find off market. They're working through

wholesalers. You're going to go talk to realtors

who have their finger on the pulse of distressed

properties. Tell them what you're looking for.

And you're willing to let them represent you

to buy the property and to sell it when it's

done being rehabbed. And you get as many of those

guys as possible in different areas. So I mean,

when I was looking, we had You go to realtors

in Huntington Beach all the way down to San Diego

I had all of these different markets looking

for a realtor I'm sorry looking for a flip all

of these different realtors that are hunting

because that's their job. That's how they make

money And again, I would say that the the most

important thing is where do you find these guys?

There are meetup groups. They're Facebook groups.

There are tons of different good ideas for that

that people gather around and real estate agents

are desperate right now, they will work their

tail off for you right now. So just to kind of

give you an idea, there are 40 ,000 richans right

now in San Diego, there are 40 ,000 licensed,

active real estate agents, there's only 6000

homes on the market. That means it was 40 ,000

40 ,000 ages San Diego. And there are only 6000

homes on the market. That means for every home

that's listed, there are four agents competing.

If you show up with a pre qualification letter

and tell them, hey, I'm a new flipper in the

area, I'm looking for a primary residence live

in flip with a Freddie Mac choice renovation

loan. I'm looking for this type of property,

whatever. They will go hunt and find you one.

They'll represent you knowing that they get to

represent you when it's time to sell it because

you don't have an agent to sell. Of course, you're

going to use them. So they see you in California.

as a duel on buying it and a duel on selling

it. And that's $100 ,000 to a desperate agent.

Trust me when I say they are out there. They

are hungry. You're not going to go to the top

10 % producing agents do this. You're going to

go to the hungry ones that are they're ready

to roll up their sleeves and start making phone

calls to all expired listings into for sale by

owners. Oh, yeah, I, you know, I love the way

told you before I love doing the show because

it's One, getting access to the information we'd

normally see. But also, this is potentially,

well, it is, but the results are bigger or smaller

depending on how many people know, but this is

changing an industry. This is changing, totally

changing an industry in a way that improves the

industry and just opens up. To that many more

you said yourself your sister said I can't qualify

for this Yeah, and and she could and she did

actually right and and so at the end of the day

This is the kind of conversation i'm really really

like because it's changing an industry I was

gonna say I was gonna say that it's not only

changing an industry. I am not Everyone's favorite

person right now rod. I'm not in the industry.

They hate me because If I teach enough people

how to find, fund and flip properties using primary

residence rehab loans stacked with a down payment

assistance program and seller concessions, then

all of the wholesalers are out of business. All

of these realtors that just want to go in and

sell a distressed property, you know, are excited

about it. But everybody else hates me the real

estate investing coaching model. They want you

to believe it's so hard, but they They're fleecing

people to the tune of $10 ,000 to $30 ,000 for

programs that don't work. If they truly were

doing that well in the industry, then why in

the world do they want your $20 ,000 or $30 ,000?

They're making their money off of screwing you,

not helping you. When I teach enough people how

to do this, wholesalers are pissed off at me.

The real estate investment coaching programs

are all pissed off. Everybody's upset that I'm

teaching this to regular everyday people for

programs that are already out there that nobody

seems to know about. Yeah, and and that's that's

what makes the world go round and that's what

makes America are the world a beautiful place

to be Why don't you uh, why don't you give everybody

a big wave? I'll throw you in the green room.

Leave the peanuts alone. Awesome And I'll wrap

it. All right, sounds good All right, Brian that

that oh my god, that was uh, that was exactly

the kind of conversation that that I wanted to

have, because I came into it generally curious

about the live and flip. I love that concept.

I love that program. And as everybody now knows,

not just because I thought it would make an interesting

episode, there's something here. And again, no

matter where you are in the country, the numbers

or percentages or let's call it margins change

depending Look at this. This can be this can

easily be done. I So I'm looking at this person

and what I appreciate is that we've been able

to to get underneath the headline You know, we've

built wealth without without that big money Sounds

great, but the important part is is understanding

what actually has happened between hearing that

idea and then successfully executing it, right?

You've got to understand the property, right?

You've got to understand different financing

options that are available to you. Look up this

book. Oh, wait a minute, hold on, folks. I messed

up terribly. I am gonna stop hanging out with

you for a second. And as I always promise you

guys, I am gonna put these comments in. To be

not the comments that yeah information on Brian's

contact information Just keep this one in Brian,

I don't think you gave oh, there's your phone

number, but I don't think you gave me your The

Amazon link and and let me bring you back on

because I did not finish one thing there Sorry,

I know we're usually a little bit more professional

than this. Did I get your, I always kind of cheek

and tongue at the end of each episode before

I do the monologue. Usually I say, all right,

I'm very proud of my copy and paste skill set.

And because I work really hard on being able

to copy and paste. So this one here, That is

your email obviously, right? Yep. This here is

your phone number and that's your website. I'm

assuming Yeah, the website is Brian the real

estate guy calm and on the bottom of every page

on that website Yes, the link to you know, I

mean, I'm sorry on the first page and on the

author page our links to the where you can get

the book But also my youtube channels and everything

else. I want to know it's all on that website

All right, give everybody another wave. Bye bye.

Thank you so You've got to understand all these

different things right you've got to understand

uh renovation costs, you know a couple a couple

things that that help you Not go flying down

in flames, right those renovation costs. You've

got to understand You've got to understand your

own financial position because there's different

buckets For you to take a look at depending on

how that sits. You've got to understand the market

of course, but but all these things along the

way are fascinating, especially the live in flip,

because the market changes. So we're just talking

about you're riding it out in your own place.

And you've got to understand the risk. You know,

that's the part of the conversations about wealth

that, you know, just sometimes they get lost.

There's no magic button. There may be there may

be strategies available to to everyday people

that simply haven't been taught, that they haven't

been taught to recognize. That's why today's

episode blew my mind because we hadn't been taught

to recognize these things. And that's what interests

me about what you're doing. Ryan, what you're

doing is fascinating. The idea that somebody

who's already paying rent every day, every month,

I mean, might be able to begin thinking differently

about that. that same housing expense and potentially

use homeownership live in flip. House hacking,

love that, or another real estate strategy as

the first one on the wealth building lack. That

deserves serious examination and especially like

your goal of I really love helping 500 families

do it. I'm one of those. I'm going to work on

this. It's too much not to, folks, because that's

where this conversation connects directly to

what we talk about here every week, every day,

really, empowering the great middle class, one

conversation at a time. Not everybody is trying

to become a real estate mogul, right? I'm not.

Well, maybe after a while I might want to. Most

people aren't looking for a hundred properties,

right? They're trying to create some breathing

room, I like to call it. They're trying to build

equity. They're trying to stop feeling like every

dollar they earn immediately disappears. You

know that feeling? They're trying to build something

they can eventually leave their kids and sometimes

building well well it begins simply Learning

to look differently at the money that you're

already spending Brian you've definitely given

me some things to to think about here to get

your book and I'm probably going to have some

Questions for you after the cameras turn off,

right? Because I'm serious when I say I want

to determine whether There's a practical way

for me to put some version of this, this strategy

to work personally. For everybody watching, I

want you to remember something important. Don't

leave this conversation thinking Brian told you

to run out tomorrow and buy the house. Educate

yourself. Get his book. Understand the numbers.

Understand the finance. Do your due diligence.

Ask questions. Talk to qualified professionals,

of course, and never put money into real estate

transactions simply because somebody on the internet

said, make it sound so easy. The whole point

of today's conversation is exactly the opposite

of that. Learn enough to make an informed decision.

Ryan Anderson, the real estate guy, thank you.

Thank you very much. Thank you for coming to

the table. And thank you for being willing to

let me push into the details. And to everybody

who joined us today, you blow me away every show,

guys. You blow me away. Thank you for being part

of this community and these kind of conversations,

these conversations as a whole. If something

we talked about today helped you think differently

about homeownership, investing, or building your

own financial future, you know what? Share this

conversation with somebody who needs to hear

it. And if you'd like to help us keep these conversations

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It's a great talk through our Ko -fi page, ko

-fi .com, forward slash Rod Dove hosts of Insights.

So R -O -D -D -D -U -F -F -H -O -S -T -S of Insights

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it helps. It really does. And we're still building

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with a hundred more followers. We need to reach

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we need to reach 100 that way we can stream these

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I'm Rod Dove, and this is Insights, the straight

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And with that, bye. Before you leave, if you'd

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And with that, producer Barbie and I are out.

Livin' Flips, house hacks.