How To Buy A Cash Flowing Property With Only 5% Down!

Christian: [0:04] Welcome to another episode of the Awesome in Seattle podcast. This is your host, Christian Awesome, of the Awesome Nossum Group at Wilson Realty Exchange, Inc, and I am a Seattle area real estate agent, Seattle metro-ish area. And today we are talking about real estate investing and how not just the normal investor with a ton of down payment can get into this game, but also how people with not so much of a down payment can then get into this game, especially if you wanna live in it and do what w- I have dubbed and everyone now talks about, uh, called house hacking. It's where you actually live in it and you have some sort of income coming in, either from roommates, no one really wants that, or another unit or two units or three units. And that's why I brought on the one, the only, Mr. Dan Keller of New American Funding. Thank you for coming on, Dan. We're hacking away today. Yes, we are. So Dan is a mortgage loan officer. We have worked together for over, I don't know, a dozen years at this point. Yeah. And there's some big loan changes that is making this easier for buyers, not just first-time buyers, but any buyer that wants to live in a building that has more than one unit.

Dan: [1:16] That's what today's episode's

Christian: [1:17] all about. Yeah. So the lending changes are basically saying, in general, that you can just do 5% down for a property w- if there's four units, up to a $1.47 million purchase price. That- that's the teaser. Yeah. We're gonna go way in-depth into these numbers, show you how much down payment you would need, show you what the monthly payment would be, show you your, your total investment and your net worth growth, and we're really gonna go into some numbers here. Disclaimer, verify everything that we're saying on your own. Don't take our word for it, but we know what we're talking about. But still, we're not gonna guarantee any of this stuff. So Dan, let, I'm gonna let you kinda- Yeah … explain what these lending changes are and what they mean for, for buyers.

Dan: [2:01] Yeah, just so you have an idea of how important this is, let's, let's share some context. So prior to November 18th- Mm-hmm … 2023- Mm-hmm … let's just say a first-time home buyer, if they wanted to buy a multifamily home, they needed to put down a minimum of 15% all the way up to 20-plus percent down. Yeah. Right? Yeah. So this is big, big news. So now it's just across the board 5% down.

Christian: [2:23] Yeah.

Dan: [2:24] If you wanna o- That's huge if you wanna live in one of the units- Mm-hmm … 5% down, which is huge.

Christian: [2:29] It's a massive change, a massive improvement. Yeah. Makes it so much easier for buyers to move into and live in one of these units- Mm-hmm … and rent out the other one.

Dan: [2:38] Yeah. And another one of the hacks too with this- Mm-hmm … is p- that gift can be, or that, excuse me, that down payment could come in the form of a gift.

Christian: [2:45] Yeah, from a family member

Dan: [2:46] or- From a family member, yeah. And

Christian: [2:47] that

Dan: [2:47] is- Yeah, I mean, there's some- There's some- … gray areas there, but yeah … yeah … employers, charities, family members. Mm-hmm. Yeah.

Christian: [2:54] Yeah, and the other thing that I always wanna point out, you only have to live in this, so I look at it as you only have to sacrifice for one year minimum. So, or maximum really. So you only have to live in this- Yeah … complex or this building for a year, and you get to keep that low down payment, that low interest rate forever- Mm … for the whole term of the mortgage. So for 30 years, that's how I would do it.

Dan: [3:21] Yeah.

Christian: [3:21] You get to keep that lower interest rate. For- Because when you're living in it, you do get a lower interest rate- Yeah than if you were to buy it as in a pure investment property that you're not living in. Yeah.

Dan: [3:30] That's what I was gonna say. To provide some clarity around what Christian's- Mm-hmm … talking about in regards to low interest rate. If you buy a home- Mm-hmm … that's considered owner occupied that you're gonna live in- Yep you do get a better interest rate than an investor like you going out and required to put down 20 plus percent would get. Yeah. So yeah, that's, that's a very important feature.

Christian: [3:46] Yeah. So I wanna explain too, like I love talking about this, not just because I think it's great for buyers to be able to do this- Mm but because I have actually lived this. The first two properties that I ever bought, the first one… Actually, they were both duplexes. So I lived in one unit, I rented out the other. I'm practicing what I preach, and it has helped me build my net worth a lot. Mm-hmm. And we're gonna kinda go over what those numbers can look like today as well. But I always like to explain that I'm not just preaching this, I've actually done it. I recommend it. It's really not that hard to be a landlord. People think it is. You can do it right. I can help you understand how to do it and teach you how to do it the right way, and that's just what I do with my clients, so happy to explain that to you. But yeah, the big thing is you can keep that low interest rate forever after you move out. When you get the loan, you're only s- guaranteeing that you're gonna live there for a year. So you can buy one place for one year, live in it, rent out the other three units if it's a fourplex. If it's a triplex, you rent out the other two, and if it's a duplex, you rent out the other one. Mm-hmm. And then after a year, you could do this all over again with another 5% down payment and buy another duplex, triplex, or fourplex. Like, that's your option. And you could do this every year for five, six, seven, eight, nine, 10, however many years you wanna do this, how many m- however many properties you want to accumulate. Yeah. So it's- It's super powerful, and that's why I really wanted to have Dan on h- on here to go over these numbers. And I'd really encourage those that are single, those that are married, basically anyone that doesn't have school-age kids- Yeah … yet, that's the people that this works best for. It can go for anyone, but once, from experience, once I had kids, this was a lot harder. Once they were in school, at least. Once they were in school, it's like, "Man, I don't wanna leave the school that I'm in. I don't want them moving every single year." You can do it, and you can try and stay in that same school zone if you want, but it gets a lot tougher.

Dan: [5:43] Yeah. Yeah, at least you made it past the, the, the partner, the spouse. Once I got married, she was like, "I'm not living in a multi-family." No, exactly. Yeah, yeah. So I got voted on that idea. Yeah, my,

Christian: [5:52] mine's funny. I came home, or she came home, 'cause she was still in college. Yeah. And I had a note. We shared a room in a 10-bedroom house. Yeah. So we were one of 10 people in this house. Yeah. We were renting it. And she came home from school, from college, and there was a little Post-It Note on the pillow that said, "I bought a house today."

Dan: [6:10] Oh, cool.

Christian: [6:11] That's literally all I did. That is so cool. I didn't explain, didn't talk to her about it. Just like, "Hey, I bought a house today." Yeah, yeah. She's like, "Wait, what?" We're

Dan: [6:16] outta here. " Speaker: What are you talking about?" Yeah. That is so cool.

Christian: [6:18] So yeah, that was fun. All right, so Dan- Mm-hmm … let's go over this a little bit more. Yeah. Let's go over some of the, the nuts and bolts of this. How do buyers get qualified? Like, what do they need to do in order to get qualified for something like this? Is this difficult? Is this easy? Like, what are the qualifications here?

Dan: [6:33] Well, I think the, first and foremost, you wanna identify up front that this is the type of property you're gonna look f- look to purchase, right? Yes. "Hey, I'm looking to buy a multi-family and live in one of the units or house hack." Mm-hmm. So, um, I think disclosing that is important, because now we can go out with your real estate agent- Mm-hmm … and we can use current rents- Yeah … to offset your… I mean, it's, most first-time home buyers aren't going out and buying $1.473 million homes,

Christian: [7:00] right? No, no. We,

Dan: [7:01] you know-

Christian: [7:01] But they could- They could … with only 5% down with these new changes.

Dan: [7:03] Yeah, and especially- Which is crazy … with 5% down. So you think about it, you know, average first-time home buyer only having to put down $75,000 on a $1.4 million home. Mm. The mortgage payment's astronomical. Yes. It's like 14, 15 grand a month, right?

Christian: [7:18] Yeah, which sounds crazy, and is somewhat crazy if you don't do this math that we're gonna b- do for you right now. Yeah. So you can understand how this is totally attainable and affordable.

Dan: [7:26] Yeah. So from a lender's standpoint- Mm-hmm … if we take, for example, this fourplex, and the fourplex is bringing in 3,000, 2,500 to $3,000 a month in rent for the other three units. Mm-hmm. You'll live in one of them. Mm-hmm. We can now take part of that rental income- Mm-hmm offset your qualifying debt And, and help you, help you qualify to purchase that. So I think that's, first and foremost, that's important. Outside of that, it's really, it's just an, a typical mortgage application.

Christian: [7:53] Yeah.

Dan: [7:54] Credit- Cool … income, assets.

Christian: [7:56] Nothing too crazy.

Dan: [7:57] No.

Christian: [7:57] I do wanna jump in real quick too. The reason that we're stopping at a fourplex and not going to a five-plus units- Mm-hmm once you go over four units, once you get to the five-plus, that's where it becomes a completely- Mm-hmm … different type of loan. Mm-hmm. It's called a commercial loan. Very different qualifications. These, what we're talking about today, does not qualify for that, so that's why we're stopping at a fourplex or smaller. And, uh, yeah, I just wanted to clarify that. That's a

Dan: [8:22] great point. I get that question all the time. Yeah. "Hey, I wanna buy this sixplex." I'm like, "Cool, go to Coastal Community Bank and get a commercial loan."

Christian: [8:30] Yeah, exactly. So let's go over the loan amount and what that means, purchase price with a 5% down payment- Mm-hmm for these different sized units. So I know from past experience when I bought stuff, a duplex, a triplex, and a fourplex had different loan amounts that kinda stepped up based on- Yeah … how big the unit or how many units there were. Yeah. So what is the, what is the, what are the numbers for a duplex? And this is for the state of Washington- Yeah correct?

Dan: [8:58] Yeah, so remember with this new program with Fannie Mae- Mm-hmm … we're kind of lucky in King, Snohomish, and Pierce County, where we have these high balance. We have the conforming loan limits, and then we get a high balance feature- Mm-hmm … which bumps this up a little bit higher. Yep. With this particular program, we're just going off of the standard Washington State conforming loan limits, okay? Yeah,

Christian: [9:16] which are still pretty high.

Dan: [9:17] Which are… Yeah. And the, and remo- and remember, I am going off of 2023's. These will get revised most likely subs- increased- A little bit higher,

Christian: [9:25] yeah … Dan: but, um, just for the sake of staying within compliance and not overselling expectations. Mm-hmm. A duplex right now in 2023, max loan amount of $929,850. So basically 930.

Dan: [9:40] So 930, add 5% to that- Mm-hmm … or plus 5%, it's about a $980,000 purchase of a duplex. Okay. Okay.

Christian: [9:47] That's- Totally doable in the Seattle

Dan: [9:49] area … yeah,

Christian: [9:50] yeah.

Dan: [9:50] Yeah. Especially, I know in, yeah, King Cou- or excuse me, Snohomish County- Yeah … for sure.

Christian: [9:53] Yeah.

Dan: [9:54] A triplex, you're looking at a loan amount of 1.123,900. Mm-hmm. So that's a purchase price of about 1.18.

Christian: [10:04] Got it.

Dan: [10:04] And then a fourplex, 1.396, so one- 1,396,800 would be the loan amount. Mm-hmm. Which puts you at just right about a $1.4 million purchase price. Purchase price. Wow. Pretty crazy. That is crazy. And, and again, 5% down, so real simple math. Multiply 1.473 million by 5%, and that's your down payment, which- Which is- about $76,000.

Christian: [10:26] Yeah. It's crazy. Yeah, so for about $75,000, you could buy a almost $1.5 million house. Right. Fourplex.

Dan: [10:35] Yeah.

Christian: [10:37] Cash. That's- Yeah … that's insane.

Dan: [10:37] Yeah.

Christian: [10:38] Yeah, you can't do that in the stock market.

Dan: [10:39] Income generating. Yeah. I mean, yeah, right? Take 75 grand, invest it in the stock market and be like, "Hey, can you give me $8,000 a month return on that?"

Christian: [10:47] No.

Dan: [10:48] It's not happening. I

Christian: [10:50] don't think so. Yeah. So let's, let's do a, a scenario here. Let's, let's go with the fourplex- Mm-hmm … 'cause that, I mean, it's a higher number so it, it sounds more exciting, and it is- Mm … kinda more exciting. Yeah. So a 1.4 s- what's the profiling? 1.47. Okay. Yeah. $1.47 million. Mm-hmm. With 5% down, that number is-

Dan: [11:11] 73, let's just say $74,000. Okay. 73, 5.

Christian: [11:13] So about $75,000- Mm … is your down payment. Mm. That's out of pocket. Mm-hmm. You will have closing costs. Right now, most likely you're gonna get the seller to pay those closing costs.

Dan: [11:22] Yeah.

Christian: [11:23] That's just how the market is right now. So let's pretend you don't have to have that out of pocket, and that'll also simplify the math- Mm-hmm for us. So what would the monthly payment be? And then after that, we'll go over what potential rents could be.

Dan: [11:35] Yeah, so you, you gave a disclaimer up front- Yes … that we're using fairly accurate numbers, but these are just estimates. Yes. So full disclosure, and I'm gonna start talking about mortgage stuff, so I might as well just drop my MLO number. Drop your MRL, MLO number. Yeah, I'm a, I'm a licensed mortgage loan officer. My MLO number in the state of Washington's 115349er. 9er. 9er, 9er. All right. So the, y- you mentioned about 73,500 is your down payment. Mm-hmm. And that's with a fourplex at about 1.47 million. So principal and interest is just gonna be shy of $11,000 a month. Okay. I'm using about $1,100 a month for property taxes. Mm-hmm. I'm using approximately $250 a month for homeowner's insurance- Yep … for the whole project. Sounds accurate. And I'm using about 375, probably gonna be a little bit lower than that, for PMI, private mortgage insurance- Yeah … because you're not putting down 20%. 20%, yeah. Okay. Let's add all that up and you're gonna be right around 12,600, uh, dollars a month, okay? Okay. It'll be

Christian: [12:34] a little

Dan: [12:35] bit

Christian: [12:35] higher. So your total monthly payment would be 12,600-ish dollars. Mm-hmm.

Dan: [12:39] Yeah.

Christian: [12:39] Which sounds like a lot, and it is a lot, so. It is. But let's go over the rents. So- Yeah … let's pretend there's a three bed- Okay a two bed, a one bed, and maybe another two bed or something like that.

Dan: [12:52] Okay.

Christian: [12:52] So there's a mix of units. They're not all exactly the same. Generally, for a three bed, we're seeing about $3,500 a month. Okay. For a two bed, about $2,500 a month. Okay. And for a one bed- 1,800 to $2,000 a month. Okay.

Dan: [13:08] These are all- Let's use 2,000 'cause that gives us $8,000 a month- Okay in rent.

Christian: [13:11] Perfect. Okay, that's- Cool … round numbers. Cool. And then you're gonna live in one of the other units. Mm-hmm. So your difference between, so $8,000 a month collected in rent- Mm-hmm … and your payment is 12, six- Mm-hmm … a month. So that's what? $4,600 a month- This is where

Dan: [13:28] the math gets fun … out of pocket. Yeah, so your, basically your mortgage payment-

Christian: [13:31] And if you're gonna, if you're want to, if you're- Mm-hmm a visual person, head over to YouTube and watch. We're gonna put these- Yeah … numbers on the screen so you can actually like see what we're talking about.

Dan: [13:40] Yeah. Yeah. This'll blow your mind because this blows my mind as a mortgage loan officer because I'm looking at a $1.47 million purchase- Mm-hmm … with 5% down, and my out-of-pocket monthly mortgage- Mm …/rent, whatever you wanna call it, expense- Yeah is gonna be $4,600 a month. Yeah,

Christian: [13:58] yeah.

Dan: [13:59] Could you buy a $1.4 million home anywhere? Even with 20% down- Yeah … you're not getting this- No … a $4,600 a month mortgage payment. So- Yeah … the math on this is really starting to pencil. Let's even take it a step further. Let's say the unit that you're gonna be living in is- Yeah a three bedroom, you know? Mm-hmm. So you could be getting $3,500 a month. You would be paying $3,500 a month. In rent, yeah. It's $1,100 more a month- Yeah … than you would pay in rent. Yeah.

Christian: [14:26] To own the place. To own the place. Get the appreciation- Yeah … get the tax benefits, get the principal pay down of your loan. Yeah. All of these huge benefits. Yeah.

Dan: [14:34] Pretty crazy.

Christian: [14:35] Yeah. Okay, so what… Let's go over these numbers a little bit more. Mm-hmm. Let's go over a five-year time span.

Dan: [14:42] Mm-hmm.

Christian: [14:43] And let's say that it appreciates very conservatively 4% a year-

Dan: [14:49] Yep … Speaker: every year for five years. Okay. That's very conservative- Yes … by the way, especially in, in King County. Mm-hmm. So if this 1.4 s- $1.47 million machine appreciates at 4% a year, over five years you'll have an increase of $300,000 in equity.

Christian: [15:07] So your net worth just jumped-

Dan: [15:09] By 300 grand … by

Christian: [15:10] 300 grand.

Dan: [15:11] So let's hit pause on that conversation real quick. Okay. So if you go $300,000 divided by five- Mm-hmm … that's $60,000 a year.

Christian: [15:21] Mm-hmm.

Dan: [15:22] When I talk with my first time home buyer clients about buying real estate- Okay … getting into the game- Mm-hmm … I always run this five-year, very conservative, just like we are right now, 4% appreciation- Yep … over five years. If I were to run these numbers very conservatively for you, that's a $60,000 a year increase of your own wealth.

Christian: [15:41] Mm-hmm.

Dan: [15:43] Divide that by 12. Okay, what is that if we divide that by 12? What is that? $5,000 a month. Could you go to your employer right now and say, "Mr. Amazon- Yeah … I want a $5,000 a month raise"? What are they gonna say?

Christian: [15:58] No.

Dan: [15:58] Probably gonna say no. 'Cause they're already paying you a lot. Yeah. Okay? And so what you've done is you've just given yourself a raise.

Christian: [16:04] Yeah.

Dan: [16:04] That's how I get… I… You get… Break it down super simple.

Christian: [16:07] Mm-hmm.

Dan: [16:08] And this is very conservative. You've just given yourself a $5,000 a month raise.

Christian: [16:11] That doesn't suck.

Dan: [16:12] No. Yeah. It doesn't. Yeah. So if you really wanna pinch the pennies, you're paying $4,600 a month in total living expenses. Mm-hmm. You just gave yourself a $5,000 a month raise. You- you're kind of living for free-

Christian: [16:24] Yeah … Dan: if you wanna look at it that way.

Dan: [16:26] Yeah,

Christian: [16:26] that's another way to look at it, for sure.

Dan: [16:27] Yeah. Mm-hmm.

Christian: [16:27] I like that.

Dan: [16:28] Mm-hmm.

Christian: [16:28] Okay, so let's go over, what are some of the other numbers that we had talked about? So you got the down payment out of pocket- Mm-hmm … is only basically $75,000. Mm-hmm. Every month, you're paying about $4,600. You got eight grand a month in rent coming in. You're- Appreciation, yep … over a year. Yep, then you got appreciation on top of that. And over a year, in rent- Mm-hmm … you're accumulating or generating, what, 400 and… What did we say? For over five years.

Dan: [16:58] Yeah, 400. You're bringing in $480,000 in total rent over five years. Wow. And if you look at just 4% appreciation- Your tenants helping you pay down what you owe- Mm-hmm … by $60,000, and you getting the IRS tax refunds that you will get under- Mm-hmm … the standardized deductions. The exchange is you've now increased your net worth by $420,000, or you've brought in an additional $420,000- Wow to your net worth. Yeah.

Christian: [17:30] Yeah. With $75,000 out of

Dan: [17:32] your pocket. With $75,000 down. Yeah.

Christian: [17:34] And you own a probably a pretty nice building.

Dan: [17:37] Yeah, you own a fourplex in King County. Doesn't get much better. Or Snohomish or wherever. Or Snohomish, yeah. Yeah. It doesn't get much better than that. So these are numbers that I think, just like you would sit down with a financial planner and say- Mm-hmm "I'm gonna give you X number of dollars of money, what's, what do you think the return you can get on my investment?" They're gonna say, you know, "7% or whatever"- Yep, whatever … 8% or 4%. Cool. Um, show them this.

Christian: [18:02] Mm-hmm.

Dan: [18:03] It's crazy. And, and just so you guys know, we do

Christian: [18:05] talk with financial planners often. Mm-hmm. And we explain kind of this process to them. Mm-hmm. And they go, "Oh, yeah, that makes more sense."

Dan: [18:13] Yeah, it does. And, and the other thing is, you know, you're gonna ha- you're gonna have… Yeah, are there risks associated with it? Totally. Yeah. But that's why you have people like Christian, experienced real estate investors that help people every single day with this. Mm-hmm. The number one question or pushback I get with clients on this is, "Why doesn't everyone do this?" Well, everyone's not cut out to be a property manager. Cool. Totally. There's solutions for that too. Yeah. So-

Christian: [18:36] You can hire a property manager to do this. So you could live there anonymously-

Dan: [18:40] Mm-hmm … Speaker: not even let your- Yeah fellow tenants know that you are the owner. Yeah.

Christian: [18:45] Have a property management company manage this. They charge about 8 to 12%, generally it's about 10%, of the rental income every single month. Mm-hmm. That's what they make. They will handle everything for you, so you don't have to do anything. They'll qualify everybody. Yeah. They'll show the properties. They'll do all the work. They'll deal with, you know, issues that arise. Now, the other thing too, we did not cover this, there are going to be issues that pop up.

Dan: [19:08] Mm-hmm.

Christian: [19:09] Every property has issues. You will have a water heater that goes out, or a washer-dryer that needs to be replaced, or a fridge that needs to be replaced or whatever. These are things that you can plan for. When you get the… Or when you go under contract, you will have a home inspection. That inspector, a good inspector- Mm-hmm … should and will tell you, "Hey, here's the lifespan of these things that are, that are left." Yep. You know? So you can help budget for those things in the future. You don't have to go in blind and just go, "Well, I hope everything works out fine," 'cause it's not going to. Yeah. That's the reality of things. The amount of pl- appliances for the numerous properties that I own right now that I had to replace over the last three years, it seems like every fridge and dryer or washing machine, like, went out in all of the units. I'm like, "I just bought one. What the hay? What, what is happening?" They all just kinda timed out- Yeah … 'cause they all were purchased at about the same time too. Yep. So they all start to peter out at around the same time. Mm-hmm. So there are gonna be some things that you do have to, um, you know, replace and stuff, and I'm here as a resource to help as your agent. I don't disappear once you buy a place. Yeah. I'm always here as a resource. I can give you my contacts, my referrals, and they can help you out, handymen- Yeah … remodelers, appliance people. Mm-hmm. Like, whatever you need, I can help you, so.

Dan: [20:28] Yeah.

Christian: [20:29] Yeah, I always like to throw that out there. All right, so Dan- Should people be buying a fourplex with 5% down? Does that kinda make sense?

Dan: [20:37] I think it f- it makes financial sense it- for the right person. Yes. I mean, the- For the right person is

Christian: [20:41] right … Dan: for the right person. You know, I'm fort- I just turned 48, and I think that y- when you talk to older people, people that are around the game, they've been around investments, the one thing that you always hear them say is, "I should have started sooner." Mm-hmm. "I should've started sooner. I should've started investing in the stock market sooner. I should've been more intelligent with my real estate investments sooner." Mm-hmm. I think the one thing that I missed early on in my life was someone like you, someone that has done it, someone that's doing it, someone that had a roadmap, a game plan, and someone that would stay by your side. Yeah. And so I want to encourage you, if you have the right people, if this is desire to get into real estate and to be a real estate investor, th- I don't think there's a better program or a better time in my 16-year m- career in the mortgage industry- Mm-hmm … which I deal with investors and I work with real estate agents like you that are investors. Mm-hmm. Programs like this don't come around often. No. This is why we're doing an episode all about this- Yeah … one change. Yeah. Because it is such a big deal.

Dan: [21:36] Yeah. And this is a government back-- This is Fannie Mae. This isn't some rinky-dink, under-the-table operation. No, no, no. Yeah. This is Fannie Mae- Yeah … the number one insurer of mortgages. So one, Fannie Mae's coming out saying, "We believe in housing." Mm-hmm. Number two, you guys, I-- they're just-- Up here in the Pacific Northwest, they're not building, they're not developing more land. I mean, you talk to any builder, they're all going after the same land. Yeah. And there's not a whole lot of it out there. No. And, um, there's- There's

Christian: [21:59] not a lot of buildable land left. No.

Dan: [22:01] No. There's n- no.

Christian: [22:02] That doesn't already have, like, environmentally critical areas- Yep … or steep slopes or wetlands or whatever. Yeah. The stuff that was easy to build on has- Yeah … already been built on.

Dan: [22:12] Yep.

Christian: [22:12] There's just not a lot of land left. Yeah. This is your opportunity. We- we're land- Yeah … w- blocked by water-

Dan: [22:17] Yeah … Speaker: and mountains. Yeah.

Christian: [22:19] And the state has implemented rules that say you can't just sprawl forever, which was smart. Yeah. There's a good reason for that. Yeah. And so yeah, the land is-

Dan: [22:28] We got our friendly Canadians above us, so we can't really go north. So

Christian: [22:32] Unless there's some sort of craziness there, which doesn't happen. They like

Dan: [22:34] to buy our stuff.

Christian: [22:35] Yeah, they do.

Dan: [22:36] Yeah, but

Christian: [22:36] they- But- Which is funny. They bu- they invest so much- Mm … in the American, like, especially the Seattle area, Bellingham- Yeah … San Juans. Yeah. They invents- invest so much money in real estate in America. Yeah. It's crazy.

Dan: [22:48] Yeah. It's so expensive up there. That's why.

Christian: [22:50] Yeah, exactly. Yeah. Well, and they don't get tax benefits. Right. But they do here.

Dan: [22:53] Right? Yeah. It's, it's the… I think this is an opportunity of a lifetime for young first-time home buyers that want to be real estate investors. Mm-hmm. Yeah. Listen to what Christian has to say. Um, and your strategy I've taught for years, not necessarily even with multi-families. Yeah. This is how you put, uh, this idea on steroids, right? Mm-hmm.

Christian: [23:11] Totally.

Dan: [23:11] Buy a home, live in it. Don't buy your first home as your dream home. It never will be. Never gonna be. It never is.

Christian: [23:16] No. It

Dan: [23:16] never

Christian: [23:16] is. Unless you hit the lottery and, yeah, that's a different story though. Yeah. That's not the normal everyday person.

Dan: [23:21] No. Buy a home, you can live in it, you get an owner-occupied interest rate. Mm-hmm. Live in it for a year, rent it out, do the same thing. What this loan program has done is it's allowed you to put the minimum down, 5%. The reason why this wasn't done a lot before is 'cause you had to put down so much money- Yeah so it would take more time to save up that down payment capital. Yep. Right?

Christian: [23:41] Exactly.

Dan: [23:41] This way you put 5% down, live in it for a year or two, or however long- Mm-hmm … you need to save up 5% more- Yeah … boom, do it again. Yep. Do it again.

Christian: [23:48] Yeah. And there's ways, going back to when issues arise, there's ways to protect yourself. Mm-hmm. Have six months of expenses set aside- Mm-hmm … in a separate bank account for that property- Mm-hmm … for when those things pop up, so you're not caught with your pants down- Yeah … and in a situation that you can't afford. Yep. Like, there's ways to protect yourself. Be smart about it. Don't go in and spend every last dime on this $1.47 million property. Mm-hmm. I mean, the bank won't let you anyway, but don't go doing something dumb like that. Like, be smart about it. We can help you with those- Yeah … planning steps and, and how to do this. And this is… If this is something that you are interested in doing in the future- Whether that's in a week or three years, we are happy to sit down with you and help you build out that roadmap- Yeah completely for free. Yeah.

Dan: [24:35] One of the things I admire about you, Christian, is I've seen you do this numerous times before with clients that we're working with. When you encounter a scenario that you, w- "Hey, I wanna see if this'll work"- Mm-hmm … run it by Christian. Have Christian or have, you know, me run some numbers, run the project, the transaction by Christian, and he'll tell you black or white- Yeah if it pencils, if it's something he would do. Exactly. I've watched you talk people out of it and just say, "This just isn't gonna

Christian: [24:59] work." I do that a lot.

Dan: [25:00] Mm-hmm.

Christian: [25:00] Yeah, 'cause not every project, not every property- Yep … does work.

Dan: [25:03] Yep.

Christian: [25:04] And it… Why sugarcoat it? Like-

Dan: [25:06] Yep … Speaker: I'm gonna be there forever for them to assist them- Yeah in this real estate world- Yep … of buying and selling and buying and selling and trading and doing whatever they gotta do to get where they wanna get- Yeah … in the future, and it's not a, hey, sell them one piece of crap and- Yeah … watch them flounder in two, three years and regret doing it. No. No. I don't want you to regret anything. I'm gonna show you and share everything that I know so that you can make an informed decision. I mean, that's why we do our Beers and Home Buying class, which if you haven't heard of that, go to beersandhomebuying.com (opens in a new tab). Every month, I host a free home buyer class. They're only an hour long. There's free beer. Some venues have food as well, so an hour to learn how to buy a house, and you'll understand the process that we created, which is very different than the traditional real estate agent. It is very step-by-step in a common sense way, not the, this is what everyone else does- Yeah … so I'm gonna keep doing it how everyone else does it. Yeah.

Christian: [25:59] And it, it just helps you understand the process. After that, you do a one-on-one strategy session. We have Dan come on with us, so you got the lender and the agent at the same time. We help you build that budget, understand what you can afford. After you understand what you can afford, then we show you what you can afford. Like, what is that? What is that purchase price? What does your budget actually get you? And where does it get it?

Dan: [26:24] Yeah.

Christian: [26:24] Like, these are all the questions that you have. You just gotta build up upon them.

Dan: [26:28] Yeah.

Christian: [26:28] And so it's, it's a fun process. It's free to understand what you can afford. Just gotta go to beersandhomebuying.com (opens in a new tab). Or if you already have come to one of the classes, 'cause we've had thousands of people come through over the eight plus years that we've been doing these classes, you can just schedule a one-on-one strategy session with me right on our website, AwesomeNossumGroup.com/schedule. Again, they're totally free. There's no pressure to do anything. It's just a, an easy way for us to inform people-

Dan: [26:57] Yep … Speaker: so that they can make a smart choice. That's all we're about. Yep. Smart choices, they pay off. Yeah.

Christian: [27:02] Exactly. Yeah. Well, that's it for this episode. Thank you, Dan, for coming on again. Yeah. Think this was super helpful. I hope you learned a lot as well. And if you ever have questions, just feel free to reach out. Dan's contact info will be on the screen and also in the show notes, as well as mine. Reach out if you got any questions. That's it for this week in the Awesome in Seattle podcast. We'll see you in two weeks. Bye.