I usually hate discussing business, but when there is something newsworthy that affects everybody in the world, whether they’re buying or selling, or they own a piece of property, like the topic of inflation then we gotta talk about it. This is the opportunity that you have to brag about real estate. This is when you bring it from the soapbox, because right now, no one’s talking about inflation. I don’t see one real estate agent out there talking about inflation right now. Why would we be talking about inflation? Well, it fucks up everything. So what I hope to do today is give you guys a bunch of different ways to create content, based upon what we’re going to talk about in terms of inflation.
To bring this conversation to life we’ve brought on Mr. Shawn Richard. He’s out of the DFW market. He works with guaranteed rate. He’s a lender. He’s been doing this for a long time. I want you guys to listen to what he says grab a pen. Then we also have, from Scottsdale Arizona, Mr. Brian Cardenas. As a veteran loan officer, Brian has committed himself to listening to his clients and providing them with the financing solution that serve their needs.
Three Things You’ll Learn in This Episode
- Why no one is talking about inflation
- How to create content surrounding inflation, but make it interesting
- What inflation will do for your purchasing power
So how do you attract new business, you constantly don’t have to chase it. Hi, I’m Mike Cuevas to real estate marketing. And this podcast is all about building a strong personal brand people have come to know, like trust and most importantly, refer. But remember, it is not their job to remember what you do for a living. It’s your job to remind them. Let’s get started.
What’s up ladies and gentlemen, welcome another episode of the real estate marketing dude podcast. And I first have to go ahead and say, I’m going to apologize for being off the show for two weeks in a row, I sort of broke my golden rule of consistency, but I’ve been working on a lot of shit behind the scenes. And for those of you that are working with us or anything else, I think you’re gonna like it to your benefit. I’ve been working on my business recently, I hired a coach, and I’m working on different things within my business. And I’ve been doing a lot of restructuring. So I apologize for missing the last two weeks, I promise you, I won’t do it again. But what we’re gonna be talking about today is something that’s going to be very relevant to the news today. I don’t if you guys follow the show, I don’t like talking about business. I’m the videos that we create. So like, I hate boring people with video content. However, when there is something newsworthy that affects fucking everybody in the world, whether they’re buying or selling, or they own a piece of property, like the topic of inflation that we’re experiencing today. This is the opportunity that you have to brag about real estate. This is when you bring it from the soapbox, because you right now, no one’s talking about inflation. Nobody’s talking about inflation. I don’t see one real estate agent out there talking about inflation right now. Why would we be talking about inflation? Well, it fucks up everything. We have interest rates are changing. We’ve been so spoiled with this market lately, that people think it’s always gonna last this way, guess what books I thought the exact same thing in 2006 and 2007. And think the Lord, I switched my business at the time that there’s a correction to adapt in the short sales and I had the best few years of my life. I’m not saying the markets gonna crash. But what I am saying is that there is a correction going to take place in the affordability for what people can actually afford in today’s market. And if you don’t want to admit that we’re going to bring on two financial Mortgage Pros, these guys are frickin killers in their market, they understand mortgage and interest rates. And if you’re a real estate agent listening to this right now, you need to know this stuff. This is the this is the time to show your expertise and get out there and start talking to people and I don’t know much about inflation, I just know that it’s a topic people want to talk about. And when there’s something newsworthy, you create content on it. So we’re going to go out today. And what I hope to do is give you guys a bunch of different ways to create content, based upon what we’re going to talk about in terms of inflation. And the truth is there is no right or wrong answer on this. Nobody knows what the future is going to hold. No one knows what’s going to happen tomorrow. However, it is you’re going to be getting these questions on the daily from your clients. Questions. People are wondering right now, if you go into Google and you type in these terms, this is why I know it’s a hot topic. So when you create content, you create content, people search for it now what you think is cool, and when the other day when I went to Google and typed it, the search related results revolving around inflation in real estate were through the roof. That means people are talking about it, which means you have a content creation opportunity. So the problem is what are we gonna talk about? That’s what I brought these two studs on. So without further ado, I’m gonna go ahead and introduce them both. We got Mr. Shawn Richard. He’s out of the DFW market. He works with guaranteed rate. He’s a lender. He’s been doing this for a long time. I want you guys to listen to what he says grab a pen. And then we also have from Scottsdale Arizona Mr. Brian Cardenas and I say Cardenas right is our card den. Yes.
Depends if you’re a white boy. Are
you Hispanic like me? You’re like a white Mexican.
That’s exactly what I am. Yeah, me too. Everyone’s
like Cuevas is a qwave asked is your last name say acid it notes Well, boss if you say what do we got a lot to catch up on? Our Anyways, you guys I want you to say Hello, Brian. First. Go ahead, introduce yourself. Tell her where you’re at. And then we’ll get you on next.
Yeah, glad to be on here. Appreciate you bringing us on. I think the criteria you had was find the two most boring guys that knew anything about inflation and bring them on so I think I won that contest was Sean there.
This is C we’re gonna this is only as boring as you make it. We’re gonna make this superduper sexy today. Brian or Sean, go ahead and want you to tell everybody where you’re from.
Yeah. Hey, Mike, and everybody. Thanks so much for having me on. So yeah, Sean Richard, with children’s mortgage team here at guaranteed rate in Colleyville. Texas for those who have no clue where Colleyville Texas is. It’s about 10 minutes outside of DFW airport right smack in the middle of the metroplex. So yeah, glad to be here. Talk about inflation. Everything’s rising across the board.
Yep. So here’s where I want to start with is uh, and honestly, like, we as real estate professionals should know this. And honestly, I don’t I’m going to be the I’ve been selling these. You guys. I’ve been in the business 20 years. I can actually say that I got licensed 2002 I actually be the guy that says that, but I don’t understand it. Okay, so if I don’t understand it, I know a lot about real estate, I’m assuming that a lot of the people in the show don’t fully understand it. So here’s what I here’s what I think the one question that every real estate agent needs to be able to answer in the country today. And the question is, what will inflation do for my purchasing power? So that’s the question, I want to see how you guys answered, let’s start with Brian, you go first. And then let’s go on Sean?
Well, I think there’s there’s two parts to it that affect your purchasing power is, the first one is we’re seeing that this with housing prices, obviously, everyone’s seen the ridiculous increase in housing prices over the last couple of years. And that is going to continue probably not at the same rate. But that is going to continue for the next probably three to four years, just based on supply and demand. Everybody knows we’ve got super low historically low supply and high demand properties. So that’s going to drive up one piece of the equation. But the other one that’s most directly, in fact, reflected through the inflation is mortgage rates, you know, we’ve seen mortgage rates jump, almost 2%, really in this year. And the reason that inflation impacts mortgage rates so dramatically is because you have to step back and stop seeing it from the consumer standpoint, you have to look at it as an investment vehicle that Wall Street investors look at it as. So when we make a mortgage to somebody to buy a house, ultimately, that gets packaged up and sold on Wall Street as an investment, just like a bond does. And what those do is those return a fixed rate of return to the investor. Well, if that investor is purchasing a fixed investment, that’s going to return him three and a half percent. But now inflation has gone up, and it drives the market rate to 5%. Well, that investment that they made is less valuable to them, it can buy less shit at that rate of return. So basically, what has to happen is mortgage rates have to go up to attract those investors to buy those mortgages that we’re making for you to buy your house. So as your rate goes up, now your monthly payment goes up, you know, when you factor in the interest rate on top of the increase in the home prices. Well said. Gotcha.
Yeah, that’s, that’s absolutely right. Brian’s got it spot on. And you know, and one of the analogies that I use for consumers, because you know, not not all consumers are super in tune with the market and things like that. So, you know, I relate it to these certificates of deposit at a bank, right? You go into a bank, and you’ve got the ability to invest in a certificate of deposit and different lengths of certificates of deposit or CDs, you know, three months, six months, 12 months, 18 months. And so essentially, the longer you tie your money up the typically the higher the return on an investment, right? So let’s say you put your money into a 12 month certificate of deposit. And six months later, three months later, that 12 months certificate of deposit, the return on that has gone up maybe from three to 4%. Well, are you are you excited about your 3% return when you know that new certificates of positive paying 4%? You know, maybe not as much so. So that’s loosely, a good analogy for what’s going on with mortgage bonds is like Brian said, the yield on mortgage bonds has to be increased to to meet investor appetite. And so new, higher yielding bonds created and it pushes interest rates higher. And like, like Brian said, you know, has an impact on on monthly payment. And
here’s what I’m so let’s just play devil’s advocate here. Because if houses are going to continue to rise in price for the next three to four years, and at the same time, the cost to obtain them is also rising. At the same time, the cost of everything else from groceries to gas is also rising. At what point does it come where affordability, I can’t afford that next house anymore that I could have afford last through two years ago? And when does that hit the fan? Because I don’t see it as a sustainable way to keep going like trust me, I don’t want the market to correct or adjust. Nobody does in that sense. But I do believe that we can have everything correlating directly up even with supply and demand because there’s going to be a point where somebody says, Hey, dude, I, I can’t put down, you know, 10% on this on this house anymore, and pay the extra $900 A month is now costing me. But then on the flip side of this, let’s play the other side of devil’s advocate guys is there’s, well, interest rates are going to go up so it makes sense to buy now and lock in if we know rates are going to go up, because the benefits of homeownership always outweigh and if we think the market is going to continue to appreciate and that might be a smart move. Soon. I mean, there’s there’s two sides here and I see both arguments and I don’t know which ones right. So how do you answer those questions?
Well, Mike, I think there’s there’s a missing element there that a lot of people are just completely overlooking. And maybe Brian can also attest to this as well. But the missing element is, is wages. Right? So what’s going on in the labor market right now, we are at, you know, post pandemic lows in unemployment. And so what you have is you have a lot of companies that are having to increase wages to attract employees. And so what wages are increasing. And I think the most recent wage report said that year over year, wages were up 12%. And so if wages are up, 12%, that’s going to help the average homebuyer afford a higher mortgage, because you don’t spend 100% of your income on a mortgage, typically, you’re spending around 25, maybe 30%, you know, maybe upwards of 35%, and your mortgage. And so when you get when you get, say, $1,000, you know, $1,000, raise, let’s call it monthly, right? So $12,000 Raise, you got a promotion. So that $1,000 a month, well, if you’re only spending 25% of your income on your housing, that means you can afford $250 more per month. And if we break that down into what that means, that means the home price, a higher home price of roughly 30 to $35,000 that you can afford based on that increasing your wages. So I think the wage increases play a role that people are kind of overlooking, yes. The the appreciation in home values, the increase in home values, coupled with the increase in interest rates, is problematic for affordability. But I think that the the the complete omission of wage increases or wage inflation makes it look a lot worse than it may be actually
is interesting I didn’t know about and I you know, I have a gas here in San Diego’s 619 As of today. Right? So what that means $105 to fill up your gas tank. So like even our employees here in the office are asking to work more from home because of that, you know, and there’s going to be some companies, though that can’t afford to increase wages, I get the big corpse but there is going to be some that can small businesses like ours can’t afford just to instantly increase our wages overnight. And that’s what I’m that’s why it’s just so interesting to me, what’s what’s going to be happening, but very well said understood.
I think one of the things did it just add to what Shawn was saying he’s he’s totally right. People don’t think about that in terms of the math equation, you know, can you afford a house, but we’ve definitely seen on the lower end of the market, where people have been priced out of being able to afford purchasing a home. And so it’s a real thing that’s happening right now, at least in my marketplace. And I think probably a lot of other marketplaces, kind of the the mid mid range move up buyer and higher end, that’s not being affected quite yet, because they’ve got more disposable income. And that’s why we see a lot of the statistics you hear talked about in terms of how home price increases, they always refer to the median home price. And what that means is, that’s the midpoint at which the number of houses above and below that have sold. So what we’re actually seeing is we’re seeing higher priced homes being the ones that are moving on the market, and stuff in the lower price range, because it’s gotten more expensive, is not moving quite as much. And but at some point, you’re right, like what your your gut instinct is telling you, Mike, is this not sustainable? You know, what is going to happen is we’re already seeing some of the indicators that a recession is coming. Like we don’t know exactly when it’s coming. But what tells us that it’s coming is that when you get really, really low unemployment rates, which is basically where we’re at now we’re about at pre pandemic, unemployment rates. And we were we were there back before the pandemic, and we actually went into a recession, which probably a lot of people don’t realize it was very short lived, they actually went into reserves before the pandemic hit. Yeah, so, but what happens is, when when things become less affordable, what ends up happening is the average person cuts back on their discretionary spending. So like, you might not go out to dinner, you know, an extra time a week that you would have done before. So what happens is now that restaurant has less revenues coming in, they have less revenue revenues coming in, well, they got to cut back on employees, and now that employee loses their job, they may have to go find a different job that’s not quite paying as much. Now they’re going to spend less money. And so what ends up happening is, then unemployment starts to tick up. And then that’s what kind of leads us to recession. Like what Shawn was talking about earlier with CDs, another indicator of recession coming is a complicated, super sexy term you’re gonna want to hear it’s called a yield curve inversion. And basically, that’s a good one, instead of the long term investments giving you a higher rate of return, which is normal. Now, the shorter term investments are giving you a higher rate of return. And that’s investors basically saying we think rates are going to be lower down the road. So what that is basically telling us is We’ve got a couple of indicators that are that are telling us that recession is coming. My guess is it’s probably coming faster than what what it has in the future. But that’s gonna push interest rates back down, which will then help affordability for the homebuyers. When we’re in that
chapter size, right, just note down. So look at the newsworthy what out the whole purpose of this is to have conversations like this with other people that are experts in their trade, and then come up with different ways to create a bunch of attention and content around this. Are you guys doing any form of lead generation or any type of digital marketing at all? In your biz? Yeah, I would love for you to test this headline. And I guarantee right now this would fucking crush it. I would do something like inflation is here. Can you still afford to buy a house? Find out now? Something along the lines of like that? I think that and I don’t know, maybe that doesn’t make me that bombs. But just hearing like what you just said, instantly? Just told me Well, if I focused on the lower end markets, and I really want to do until that down, even just an engagement post to your actual database and posting on social or sending a video email out with this topic. inflation, inflation is here. Inflation is real. Can you still afford to buy a house? Or on the flip end of that you could take that same headline and be like inflation is here has it has it affected the value of your house? For people that are own owning houses. So we’re always looking at ways to create content and create different media or ways to start conversations. This is all content creation is guys. I don’t create content because it doesn’t create conversations. I create content because it creates conversations that lead to more opportunities, which is how you attract business. So what I’m getting at here is like you got all of these questions being answered like I could we this show might be an hour long, I still have like 20 More questions asked you guys. But each time I asked one of these questions, if I’m thinking about it, so is your average customer avatar guys. So fuckin put it out there. There’s not a better way to become the expert and to demonstrate you our talk is cheap me getting up on my soapbox and being like, Hey, I’m the best on the bus. That’s how that’s every real estate agents business plan show sold just listed. brag, brag, brag brag. instead? Why don’t you start demonstrating me what I need to know so that I could see you as a professional. I’ve never seen a it’s crazy when we look at how real estate agents market their business. I made this post the other day. And it says if a doctor marketed their business the way realtor does, after after they after they do like a surgery and the doctors like hold it up like $3,000 like breast implant surgery cardiac whatever, like that’s what real estate agents do. And it’s the only profession we’ve ever seen it happen you know what I mean? Like but why is that it’s because our egos all the time like there’s such a better and better way to earn expertise and authority and build it by just creating content and shit that’s relative or what people care about not about you. It’s always about what can I do to serve my audience today? This is why we have this podcast guys. I think podcast we don’t have a lot of our business we get a lot of our business from the show because we add value so how do you add value what today’s topics
we started doing? We just funded posts that’s the best way we can can join the fray.
You guys should be like just funded.
Yeah, I was able to do the minimum expected requirement out of my job congratulations me.
Yeah. I got someone a loan they probably shouldn’t be having right now.
That was like 15 years ago.
Yeah, the good old Nina’s. Anyways, let’s get back into this. So what do we know? Let’s go into like what you guys see how because that’s super interesting. And you guys are both especially in your two markets like you guys have ibuyer Haven so inventory is extremely low. You got every open door from now no longer Zillow, but all of the institutional buyers are all over Scottsdale. There’s a huge problem with that they’re buying everything investors can’t even find properties to buy in Scottsdale anymore. They’re having trouble they’re fighting each other for the scraps but the same things in DFW so we have a lot of things happening you have a lot of institutional buyers are buying and cash out. Kicking the VA guy who deserves his house to the curb, to be honest. Right? What do you guys think? What is your prediction? For like these first time buyers like what are you people that are out there going to go out there and compete? What are you seeing happen are you see, are they losing deals yet? You mentioned you alluded to a little bit earlier, but have you seen people losing deals? Are they staying in the market? Are they getting frustrated? What’s the pulse you’re getting from your realtor partners and all of that?
Yeah, can Brian you get if I jump in on this one? Yeah. All right. So yeah, so like that’s what’s what 100% was happening and I’m sure Brian’s got plenty of experience because I know the Arizona market is red hot. And they’ve got some of the most depreciation the entire country going on right now. So Yeah, buyers are losing deals first time homebuyers. And if they don’t have cash laying around to be able to go over to guarantee appraisal gaps there, they’ve got a bit of a problem. So you know, I know here in DFW, you know, my team and I, we’ve been looking for ways to help buyers set themselves apart by being able to take finance buyers and turn them into cash buyers. I know, Mike, you’ve talked about that before, some programs. And so we’ve got some some companies that allow us to turn finance buyers into cash buyers, but outside of stuff like that, it’s tough for first time homebuyers, for people who maybe, you know, they’ve got enough cash to cover downpayment and cash to close, but not a whole lot more than that. It’s a really, really tough market. And so they’re, you know, their options are, sit this one out, which could be 3456 years, and then that $350,000 home is now $500,000.05 years from now or more, you know, or they they’ve, you know, figure out a unique out of the box scenario to try and get into a home right now. And if they can do it, there’s tons of benefit, because one, they’re going to get the appreciation that’s going to come over the next several years, which is going to be phenomenal. But on top of that, as Brian alluded to, we’ve got a ton of indicators that say that we’re going to be in a recession in the not too distant future. And with you know, normally, you know, he’s talking about the yield curve inversion. Normally, when that happens when that yield curve inverts, we’re in a recession within 18 months. But honestly, with information moving as fast as it does nowadays, we can see that significantly faster than that. So everyone who’s buying right now is going to get the appreciation, but then they’re likely going to be in a position where they get to benefit from a refinance sometime over the next maybe six to 24 months.
So let me rewind that just for people really quick, just so we get the terminology, right. So basically, today’s higher rates, the fact that we this is what I’m gathering, this is a really interesting comparison for all you realtors, when buyers ask you this, because you have to Homer Simpson, this stuff down, we’re giving you like really high level stuff, you have to make a dumb simple so that anyone can understand including my six year old son. So what we’re saying is that yes, today, here’s what’s going to happen, folks, there’s going to be a recession, all indicators are showing there’s gonna be a recession that’s happened is going to happen. And you might be wondering what that means for your upcoming house purchase? Well, here’s the way that we’re looking at it. Yes, today’s rates are probably going to be around a 5%. But the day that recession does occur and or happen, rates are gonna dip again. And that’s where you need to refi low into your low interest rate, while property values still continue to appreciate.
Yeah, I mean, we do with people like that, as you know, we’ll show them, what is it going to actually cost you in real dollars by waiting, you know, six months, 12 months, whatever to try to time for, you know, the bubble to burst, which you hear about a lot, you know, is there a real estate bubble? And the simple answer is no. But, you know, some people think, well, maybe we’ll just wait till rates come down. That’s the next thing that we started to hear. Well, we can actually quantify. And I know, Shawn, does this too, how much are you actually losing in equity growth and pay down on your mortgage by waiting six months, 12 months for the interest rate to come down. And it’s almost like, the best analogy, I think, for a real estate agent is, you know, you look at a house flipper, you know, they go in to purchase a house, and they’re using financing that might be you know, eight 910 12% interest rate, you know, with points just to get that deal. And they’re going to try to flip that as quick as possible to turn that into a profit, they look at that higher cost of acquisition as the cost of doing business. And that’s how you know, a person purchasing a home, whether it’s for an investment or for their own personal use, yeah, you might have a little higher cost of acquisition today, because the rates are higher than what you think they should be or what they were six months ago, but there’s going to be an opportunity for those rates to come back down, just look at that short term, whether it’s six months or 18 months that you pay a little higher interest rate to get that house that’s going to appreciate by you know, 10% 12%, whatever it’s going to do in the next year. It’s just the cost of doing business. And the sooner you get in the better opportunity, you have to capitalize on that equity growth.
He’s spot on,
I go piece of content creation. Number two, why it’s a good idea to buy a house when there’s about to be a recession. I’m sorry, I’m going to read that. Alright, Sean, go for it.
Well, I’ll just kind of piggyback on what Brian said is absolutely, you know, one of the you know, when I have conversations with clients, you know, I remind them I obviously don’t have a crystal ball can’t guarantee we’re gonna be in a recession even though a lot of indicators are pointing that direction, but I encourage them to think of you all Brian’s got
got to get one man it’s super happy. He’s got to first of
all, if you’re listening to this just on an audio Brian just whipped out literally a Christmas ball and all I saw were a bunch of interest rates floating around there, and a bunch of numbers and all this shit and just I just I just saw opportunity.
You want to know what else
Oh, and he’s got the magic eight ball. That thing never fail. thing does work right.
But I like to remind clients I encourage them to think The current acquisition costs the rates as a temporary cost, you know, that way, hey, this is a temporary cost that you’re likely to have for the next 612 1824 months. And then you get to turn around and reduce your cost. And for that reason, I think when when, when available, I encourage people to, to minimize out of pocket costs, save that out of pocket costs and put it into the refinance down the road, if you if you can take a slightly higher interest rate, even then where interest rates are now if you can take a slightly higher interest rate, and save, save money at closing and reallocate that money to refinance on the road, you’re gonna end up coming out even further ahead. In a lot of cases.
I think it’s smart. Here’s how when you guys are trying to explain this to home buyers or sellers, you have to do it in the form of a story. It’s just too complicated. Not too. It’s an excellent way to position it like look, here’s how here’s how real estate investors approach, but purchasing properties. And this is the way that I look at it and approaching it from a real estate like you have an acquisition cost. Like that’s the way you sell this guy’s 100%. Because I understood that in honestly, you guys both taught me some you guys taught me a lot today already. I never really thought about how to pitch it that way. And I’ve never really thought about, hey, yeah, this is explaining a purchaser just like they’re being a real estate investor right now. That’s so smart. It’s such a smart way to position this. Because there’s fear, there’s going to be fear when there’s uncertainty. And our jobs as professionals, folks, for all of you salespeople chasing checks, this is the time when the market cleans you out. I’m not joking, I’ve seen three shifts, I’ve seen three cycles, two and a half in my career, I think this is the third, I saw the new construction boom, prior to 2007. I saw the short sale foreclosure crisis, from oh seven to 12. And then we saw the rebound right here in the real estate market. If you study it repeats itself in 10 year cycles in 2012. As we start climbing out of that crap, we’re at 2022, right there at a 10 year cycle. So everything these guys are saying is right on, where do you see in recession, correction, all that other stuff. What’s interesting is that we’ve never had all these outside circumstances happen with it. And we’re going to need to sharpen our skill set regardless. Like, if I’m you guys, and I’m sure you guys are prior to doing this, because you’re killers, but what you just said about explaining options to all of your the clients, if you started doing after realtors and laying this out for them, you’re gonna have the meeting out of your hand. But it’s gonna take an extra step to create those three options and give them a full plan. We have a client, as you guys know, his name is Mac Humphrey. And this is what he’s doing in his office because we’re creating some of his videos for his new offering. And I could see why now Mac is doing this. I’m sure I’m going to see him in Vegas this week. And I’m asking him if this stuff that we talked about today is the reason why he’s doing this. And what Max doing is max sane. Anytime you do a mortgage app, you have to come in to my office. And he set his office up into four different workstations. And workstation number we get some he’s got a beer, he’s got one, he’s got food, he’s got sandwiches, he’s got water, tea, you name it, he has them come in their office, and they once they get them settled down, they go in they he treats them and you know, the receptionist welcomes there. And then they spend 10 minutes in there filling out their forms in a questionnaire but then they go into the planning room. When they go into the planning room. This is where Mac literally goes, Okay, let’s talk about all your options, how much money you got done with the credit? Like what are the goals, how long you’d be on this property for what do you want to hear what you wanna do there. And he spends about 2030 minutes getting all the information from them, his team will go back into the other room and crunch the numbers and the programs and then he they move the client into the opportunity room, the opportunity room, there’s tons of plasmas, there’s a freakin pool table in there and everything. But each plasma television has a different loan option for them based upon all of this stuff we’re talking about today. Here’s your 3% down, here’s your 5% down, here’s your bridge loan option. If you want to try to be a cash buyer, here’s your 20% down with no PMI. Mack is going to do two things. One he’s going to sell through experience because that’s all we are. We’re service providers, we’re commodities, the one who provides the best experience is one who always wins just like the Ritz Carlton charges the same price as they do for a night and a holiday and also charge the prices for a night. They’re both in business but they’re both in business to provide a certain type of experience. We are do the same thing in our business and what I think is gonna happen. I think we’re gonna have another cleanup of the real estate industry and rightfully so we need it. But the ones who will excel are the ones who take customer service to the next level for stuff like this. Anyone can show a house. That’s not but not everyone can help someone accomplish and achieve to obtain one. And this education for the next 12 months about knowing what this stuff is going to happen. Mark my words the people who really mark this down, they’re gonna you’re gonna see them excel. And if you guys have anything like that and you start selling options for all of your realtor partners, I would be giving you every loan I had, because most agents aren’t going to be smart enough. have the skills to crunch numbers. Now you guys are dumb, we’re, this is our business, we show houses, okay, we don’t crunch numbers, that’s these guys’s job, find a lender that’s going to do this and start selling options, especially when you’re working with your buyers, because the one that has them is the one who’s going to win. And you’re also, you’re going to see commission compression too. You’re gonna see, let’s see, that’s already happened. But I guarantee it and all the stuff that’s happening with NAR, when they try to get buyers to pay their agents commissions, this is gonna be a whole nother ballgame. We don’t know what’s gonna happen with that. But you guys have to know about this stuff. Because there’s always a way to compete, you just have to have the best food on the block the best food is the best service and experience. Go ahead read.
I was just gonna say that. I think no, Shawn does this. And there’s a lot of lenders out there to do this. But being able to look at your your potential clients situation and help them think outside of what their little perspective is because they come in, they want to buy a house. Okay, they got the blinders on this one, how do I get that house? And what we try to do step back and look at this from a longer term perspective, whether it’s, you know, five years, what have you. And what we want to do is start with that education process and figure out what is the plans? What is the long term plan? And then what are loan options that help you achieve that. So one of the things that we do is, will always show those lower down payment options. You know, I know most agents that I talked to on the listing side, they want to see 20%, down 30 40% Down, they think it’s a stronger offer, you know, but there’s ways to present an offer, where you’re showing the client, well, you know, that five or 10% down financially is better, because you can reserve reserve that money back that you’re putting down to avoid paying, you know, 5% interest today. But you can use that money to go do something else and make more money. And even if it is to look at the prospect of a year or two, three years down the road, buying an investment property, well, having a lender partner on the realtor side of it, where that lender is thinking long term and setting that client up for the expectation. There’s future opportunities with real estate, if the market is going to go up at 10% 20%, or whatever for the next couple of years. Well now what we’re doing right now, the craziest thing is about 80% of my current pipeline is refinances. I normally do about 65 to 70% purchases, it’s crazy, because what we’re doing is we’re going back and revisiting with these clients who a year or two ago bought, now they’ve got a ton of appreciation. Now they’re accessing that equity, and looking at either improving their property, consolidating debt, so now they can afford to purchase another property, buy an investment property. So those are all opportunities. If you’re thinking big picture and long term as a real estate professional and a lending professional, you’ve got to get people thinking outside of what their immediate desire is and start planning for the future. And, you know, I know realtor’s they want to go in and make a cash offer with all these people, they’re buying cash. Well, great, that offer looks outstanding. But could you do something else with all that cash, like buy two properties, buy three properties by leveraging the bank’s money. And even if it isn’t a little higher rate today, you’re going to be able to get a lower rate in a couple of years. But you can gain the appreciation of those two or three properties as opposed to the appreciation on one, he’s got to think outside the box.
Has there been a lender yet that’s created a finance a finance certification course for real estate agents? And if so, why not?
It’s a question. But like, why,
why not? Why aren’t you creating a certification course for real estate agents to teach us this stuff? So we could go out and have the ammo? Have all the forums and the docs and all of that? Like, because I will. I’ll be honest, I don’t want to learn this shit. And most real estate agents don’t I just want my team to know it. But I need to know enough to be deadly to have the conversations and then refer them out over to you guys. You know, I mean, man, that’s a goldmine.
Finding the right partner?
I’m like, no, no, and Brian, just finding the right partner is really important. And he’s, you know, he’s spot on with the approach, you know, and my team and I were the same way. No, we, you know, we don’t really sell mortgages, we sell peace of mind. That peace of mind usually comes with a mortgage. But we talk about client’s financial financial goals. Every single client I speak to I asked them, you know, what, other than this home purchase, what other goals? What other financial goals do you have on the horizon that we need to make sure that we’re keeping in mind as we work towards a solution for you on this? You know, I declined today. So I mean, that he he’s self employed, and he really hasn’t done a great job of setting aside, you know, a retirement account. So we talked, so we talked about how we can help them into a home, try and keep, you know, not spend all of his money on down payment, so that way he can take some of that and really start to fund his retirement, which gives him peace of mind. And so peace of mind is, in my mind, one of the most important things that we can give our clients today and that peace of mind for us comes with a mortgage.
Yep. I like it. I agree. Okay, a couple more questions. We’ll get this wrapped up. lost my train of thought. But I know I was asking you something along the lines of
we’re talking about financial literacy for financial course certification course for realtors. Yeah,
that’s a good that’s a given. Like, if you own a mortgage company right now and you’re not that’s not on your agenda. I don’t know what’s wrong, you call me. I’d love to help you put that together, because that’s a fucking goldmine. I do think that people, I liked the approach you guys are taking? I think it’s smart. What do you think that the average agent though? What do you think they need other than they need to know this stuff? I mean, this is I think that everyone’s going to have these conversations, like you’re going to be sitting with a new buyer console. And you’re gonna be sitting at lunch or in your office wherever they go. And they’re going to ask you this stuff, guys. Once you start seeing the media start talking about the word recession, trust me, people are gonna get worried and scared. Because you guys the way you You made me the way you explain it, you made me feel good about a recession. Seriously, that’s what you just accomplished. Right? And normally, that our word you hear any run the other fucking way. You don’t ever like Oh, recession, I’m not buying a house. But the way you guys presented that, I think is a conversation that is going to be needs to be had with agents and their clients to some extent, and I think it’s going to be a topic of conversation to come. And we’ll see in six months if we’re right or not, but I think this is the that that advisor, consultant expert, the authority, a lot of that, and the only way you ever become that guy is by creating the content to have that conversation to begin with.
Well, Mike, every recessionary period since 1980, with the exception of 2008, you know, and and although yes, that was a recession, I don’t look at as a recession, that was a crash, right. That was a full blown crash. Every other recessionary period since 1980. Home prices have done one of two things, they’ve either continued to appreciate, or they’ve started to plateau. But when that recessionary period was over, in all of those instances, including 2008, home prices, appreciated after the recession was over. So good. So home, it’s home ownership, it like I don’t wanna say there’s, there’s never a bad time. But it’s, it’s historically proven that buying a home is almost exclusively a great way to build wealth. And so, you know, recession yeah, there’s a lot of bad things that go with a recession. I’m not going to try and fool anybody, you know, employment, you know, unemployment ticks up, you know, but if buying
a house isn’t one of them, that’s what we fucking put our hands. That’s what we that’s what we fall on the sword for dude. You know, I mean, if you if you can’t, here’s the things like, I see this all the time. I have no problem selling people my video services because I know exactly what they do for people. I know my value. I know every single person that does what we tell them to do doubles quadruples their business, if they follow the damn plan, okay, it’s not. It’s not rocket science. But there are so many people, it’s because I’m confident in my service. There’s so many people who sell their service and don’t believe in it. There’s a major difference in that I see it every day in the real estate industry. I saw a guy make a post the other day on Facebook. This is what the guy says, I’m not going to call him out. But he posts on Facebook, I’m sort of seeking this market. I can’t wait for a short sale or foreclosure market. Bro, that’s when people get a lot of pain. Your real estate agent saying this excuse me, mind you. Like who says that? That just tells you right off the bat, that you don’t have the confidence to sell your own product. So what you’re really doing is you’re poisoning people. If you’re in a restaurant and your food tastes like shit, and you continue to feed people that damn food, you’re a prick. Well, that’s a difference in the real estate business. You have you you guys have to know this shit. Like there’s no questions asked anymore.
Yeah, like getting yourself as a real estate professional is is critical right now. Because there’s there’s two words that you’re starting to hear all the time. Number one, everyone’s hearing inflation. I just saw a little news thing I was walking through the room, my wife had the news on which I hate watching. And then we’re talking about recession. So those are the two scary words that are coming out to you inflation and recession. And so as a real estate agent, you’ve got to be able to educate your clients on what does that actually mean for you if you’re contemplating getting into a new house or buying real estate as an investment? Those are not bad words for the real estate market. And people have to understand and differentiate. Yeah, can it mean job layoffs, there’s there’s pain that comes with it. But if you’ve got a good solid job and a good source of income, real estate is a hard asset. hard assets do well, in inflationary periods, and recession. Like Sean said, real estate tends to do well interest rates come down during a recession. So those are all good positive things to be able to look at when you hear the scary words because you’re gonna hear it on the news that’s how the news gets clicks and they get viewers to scare the shit out of everybody. That’s what they’re good at. But I hate to combat that.
I hate to do is if you’re listening to those turn it off. None of it’s right or accurate. Dig a little deeper.
Brian spot on and I’ll add one more thing on that. So You know, as far as you know, real estate professionals educating themselves, you know, if you’re a real estate agent, and you’re having conversation with a client, and they bring up these topics, if your only responses, that’s a great question. Let me get you with my lender. If they’re not ready to have that conversation with a lender let yet you probably just lost that business. Yeah, right. So you’ve got to be able to at least have some semblance of a conversation initially, before you get to the point where you’re like, hey, you know what, my lender can really elaborate on that topic? And let me let me connect you with you know, let me connect you with Brian, let me connect you with Sean. And they can really elaborate on it. But if you can’t have at least that initial conversation and have some level of education on it, you’re you’re you’re in trouble in this market, this market weeds out the people who are not, are not experts at what they do.
100% Last question. Well, you answered the interest rate question. So bottom line and your guys’s experience, you think that yes, rates are going to going up. But as your indicators are showing a recession is going to come in that you’re going to see the rates go back down at that time. Overall, you’re gonna see a lot of buyers who buy from now until then, to refinance back into the low rate when that hits, and you guys have enough experience to feel confident about that call, right? So this is the this is all forecasting, guys. Here’s the biggest thing I got on today’s show. And here’s the conversation. I think that if you’re listening to this, you don’t need to do a super duper edited video, you don’t need to go out do anything crazy. You can do a video email to your Bom Bom and you guys included in the subject line is inflation and a recessions upcoming. But this is why it’s the upcoming inflation and recessionary period is the reason why you should buy a house today, something along the lines like that, there’s something there that’s going to generate a lot of the clicks.
Is myself recession proof by yet.
There’s so many different headlines there. And it’s something to get there because no one’s talking about it. That’s why we’re doing this podcast. I’m going to create a piece of content here and test it on ads about what Brian had on approaching it as an investor is buying a house right now a good idea. It’s inflation coming, should you really be buying a house right now? Fuck yeah, you should, here’s why. That’s probably my attention getter. Something like
that. Even your investor clients do, you know, I was talking to another one, she’s got five properties. And you know, she’s she’s pretty sharp, she came to me and she says, No, I’m thinking about refinancing, pulling some cash out my investment properties to go buy another property, I know my rates are going to be higher, but I just look at it as you know what you need to do to be able to get to the next property, because the appreciation that I’ll get on this next property is more than going to cover the increase in interest that I’m paying on these other loans. And I said, you know, you’ve done half my job, I don’t have to educate you on it, you You’ve done a great job with it. But here’s the other thing to look at too, is if you can, no, some, some people are worried about negative cash flows on their investment properties, okay, because rents are going up, but they’re not going up as fast as the increase in the home prices. And now interest rates going up. Again, I just look back and say, you know, it’s a temporary situation and look at it that way. Because while you may have to carry, you know, a couple $100 negative cash flow, if you can handle it, that doesn’t necessarily mean it’s going to always be that way, because you’re gonna have to things are likely to change down the road, you’re going to have rents continuing to increase because of the shortage of housing supply and the housing crisis that we’re in. So while you may be negative today, a year from now, two years from now, you’re probably not going to be negative. Plus when rates come down as we expect him to you can refinance into a lower rate and improve that cash flow situation. So again, short term costs for long term gain, you might have to absorb a few $1,000 over a year to in negative cash flow, but you’re gonna write it off anyway. And then you’re going to have that appreciation grow. So like whether it’s buying somebody buying their their primary residence or investors, like you shouldn’t have them putting these roadblocks up because of, of inflation of recession, or negative cash flow. Those are all things that are easily combated and overcome if you know how to explain and plan for what’s down the road. And that’s where that thinking outside the box is thinking past today is super important. Like you don’t always look at today’s situation as the permanent situation. You got to think down the road
awesome show you guys you guys taught me a lot and you gave me quite a bit of marketing opportunities to come that’s what they are their marketing opportunities. And the more controversial you are with them, the better they’re going to do you guys, like address the elephant in the room always. And don’t hold back, like the whole point of starting a conversation and generating attention and you have a great opportunity to do so right now. Why don’t you guys if you guys need someone if your lender doesn’t know any of the stuff that we just talked about, call these guys up. Obviously, there’s a reason why we had him on the show. So if you need a lender that actually will educate yourself for you so you don’t have to go through your own financial literacy class once you guys give them your info and how they could contact you.
Yeah, go ahead, Brian. Start us off.
Yeah. Brian Cardenas. My website is www dot the Cardenas team.com our phone numbers 480314684. Or you can shoot us an email Cardenas team at finance america.com.
Yes, and I am Sean Richard with with guaranteed rate here in Dallas Fort Worth metroplex. My website is Shawn Richard team.com My first name is spelled SHA w n. So Shawn, but your team comm can also reach me via phone at 817-380-8148 and can always drop me an email at Sean Richard firstname.lastname@example.org
Appreciate you guys awesome show and thank you folks for listening to this episode the real estate market dude podcast if you want to build your personal brand with video and start creating consistent content so that when anyone thinks that the term real estate or mortgage instantly associate your name with it, you don’t need a bunch of leads you need more dudes let us create the content for you. All I need is one to four hours a month and I’ll turn you into a local celebrity that I promise if you follow the process it works and if you don’t believe me watch the case study where I have both a mortgage broker and a real estate agent write on my website both generate a 931% ROI plus return using video in just under six months the whole case that is there I highly encourage you guys to download it get it read it and then contact me and start getting on video because attention is the name of the game lead generation is not appreciate you guys have a good day and appreciate listen to episode we’ll be back next week peace. Thank you for watching another episode of the real estate marketing dude podcast. If you need help with video or finding out what your brand is, visit our website at WWW dot real estate marketing do.com We make branding and video content creation simple and do everything for you. So if you have any additional questions, visit the site, download the training, and then schedule a time to speak with the dude and get you rolling in your local marketplace. Thanks for watching another episode of the podcast. We’ll see you next time.