Viewer Questions Part 1: Interest Rates, Single Family Homes, Divine Connections, & More

Episode 176 May 09, 2024 00:23:25

Show Notes

You asked, and we answered! In today’s episode of The WealthBuilders Podcast, WB Coaches Karen Conrad Metcalfe, Troy Peterson, and Mike Davis address your burning questions about real estate investing, business, and wealth building. Among the questions covered are:



Learn how to work smarter, not harder, as a wealth builder and investor on today’s power-packed episode!



Also we would like to invite you to participate in our free Business and Non-Profit Bootcamp May 20th-24th. To register visit:

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Episode Transcript

[00:00:00] Speaker A: And now they've got all the databases that are coming in, and it actually gives you a lot of good information. [00:00:06] Speaker B: It does. A lot of good information. But you mentioned looking at the other properties to see what they are, and I think that's really the key. You have to, whether using Zillow or using Redfin, you have to look and see what else sold in the neighborhood. [00:00:34] Speaker A: Hello and welcome to this week's Wealth Builders podcast. We have a really special podcast for you today, and it is answering all these questions that have come in on the recent webinars and even the wealth Builders boot camp. And I have two of my most favorite people in the world. I'm so blessed to be working with these guys. I've got Troy Peterson, who's one of our real estate coaches, and Mike Davis, who's also a real estate coach and friends and family. Yes, because we're actually family. Right? [00:01:06] Speaker B: We are. We are. [00:01:07] Speaker A: Yeah. So it's great because, Troy, you came in from Florida. [00:01:10] Speaker B: Yes. [00:01:10] Speaker A: And Mike drove up from Pueblo. I am so honored that you would make this drive. It's great. [00:01:16] Speaker C: It's a good drive. [00:01:17] Speaker B: It's good. [00:01:18] Speaker A: Yeah. And we're in Colorado Springs, so we're just, we're together usually we're on Zoom, and so we're pretty excited about this. We've got an event this weekend we're doing together. And so we thought, hey, let's get together in person. [00:01:29] Speaker B: Yeah, this will be fun. [00:01:30] Speaker A: So here's, here's the deal. So I told these guys, like, grab a stack, right? [00:01:35] Speaker C: Yes. [00:01:35] Speaker A: And we're going to get through as many questions as possible. But I want to thank all of you for being part of the wealth Builders boot camp. That was amazing. We had over a thousand people registered for that, and many of you were a part of that. And we sent out the replays. We're actually going to have a business, wealth builders business and nonprofit bootcamp that's going to be coming up in the next few months. So watch for that. And then we're going to do a real estate one as well. And so if you missed it, what that was is we did five days in a row where we chose topics we were focused on, Billy's Triple X factor, and we each shared on that. And Billy shared one night, too, which was really great and just answered as many questions as we could just to encourage all of you to get moving in this journey of building wealth through God's principles. So, guys, who wants to start with a question here? We'll just dive right in. [00:02:31] Speaker B: I nominate Mike. Let's get started with Mike. He's got one right here. [00:02:35] Speaker C: This is from Winnie. Winnie, is this the right season to buy a home with high interest rates? [00:02:43] Speaker A: Oh. [00:02:43] Speaker B: Oh, wow. We get that question a lot. [00:02:46] Speaker A: We really do. Troy, do you want to start out and answer that one? [00:02:49] Speaker B: There's a saying that goes like this. It says, you don't wait to buy real estate. You buy real estate and wait. When I got out of high school, interest rates were up to 18%, and people were still buying homes. So we don't wait. And what was the study we talked about? [00:03:05] Speaker A: Yeah, I sent you guys that meme. [00:03:06] Speaker B: Yes. [00:03:07] Speaker A: Okay. This is if people wanted to wait. The interest rates, oh, first of all, in the 1970s, were at about 7.5%, you know, pretty similar to where they are today for a lot of people. And if people would have said, which many did, I'm going to wait until rates go down to buy real estate, they would have had to wait till well into the nineties. And get this, between that point in time and in the nineties, houses quadrupled in value. [00:03:37] Speaker C: That's unreal. [00:03:38] Speaker A: That just really hit me, like, oh, my goodness. [00:03:41] Speaker C: Yes. Yes. [00:03:42] Speaker A: Because we want everything to be perfectly lined up. But really, what we teach and what we share is based on Billy's principles, is like, if the numbers work, interest rates aren't really something to have to think about, right? [00:03:55] Speaker B: That's right. Yeah. 7%, 17%. If the numbers work, the rate is not relevant at all. I also look at it this way. If it scares a few other people out of the market, it creates more opportunities for us to buy. So let's take advantage of the opportunity. [00:04:08] Speaker A: Oh, yeah. Troy, he gets all excited about this. This is reminding me of the excitement on the boots on the ground with our advanced real estate coaching clients. We walked into a house that was horrible, and Troy had this grand, irritating ear. He's just, like, loving it. [00:04:25] Speaker B: I love ugly properties, and I love the look on people's faces when they walk into. Especially yours. [00:04:33] Speaker A: I want to walk right back. [00:04:34] Speaker C: You don't want to breathe in that deep, though, when you walk in. [00:04:38] Speaker A: I have learned, you know, that actually, it's very nice to see a property that's in rough shape. But, man, that one was like, really? [00:04:46] Speaker B: That is the smell of money we've always heard Billy talk about. [00:04:49] Speaker A: That's so true. So true. So. So I guess, you know, our advice would be, is look for the property that works. And there's another saying, too, that the best time to buy was ten years ago. But the second best time to buy is now. [00:05:06] Speaker B: That's right. [00:05:07] Speaker C: And Bill Bronchek always says, who wouldn't want to have their house that their parents had when you were growing up as a kid? Oh, my goodness. [00:05:15] Speaker A: That is so true. [00:05:16] Speaker C: It is. [00:05:17] Speaker A: All right. That's great. All right, can I go next? [00:05:20] Speaker C: Go ahead. [00:05:20] Speaker A: All right, this. This is from Sharon, and this is on insurance. And I think this is a really good question. I know in Florida, Troy, you know, we invest there, and insurance is a little tricky in Colorado. But Sharon is wondering, is, is there any resources or something that she should be doing to help with getting lower insurance rates? And, Mike, I think you kind of have a good answer for this. [00:05:48] Speaker C: Yeah, I have an insurance broker, so she does the shopping for me. And she is so good. She's just an excellent person. And because she, she will always get me the lowest rate. And so that would be my advice to get an insurance broker instead of just going with Allstate or state farm. [00:06:05] Speaker A: Or a main company, because the broker has access to multiple companies. [00:06:09] Speaker C: Right? [00:06:10] Speaker A: Right. [00:06:10] Speaker C: Yeah. [00:06:11] Speaker A: And then they can shop. And a mortgage broker is like that, too. [00:06:14] Speaker B: Yes. [00:06:14] Speaker A: And, Troy, like, how are you finding good insurance in Florida right now when we know that there is some challenges? [00:06:20] Speaker B: Well, the number one way is we've got a great broker that we work with. In fact, I spent about half an hour with her on the phone yesterday. I had a client call me buying insurance for one of her investment properties, and she was getting quoted $3,000 a year. So I called Angie, and after a 20 minutes conversation, she found something for $500 cheaper. So there is a good broker out there who can shop it and put forth the effort, and I'll save you a ton of money doing it. [00:06:45] Speaker A: Yeah, that's really good. We actually use Angie, too. Yes, you do see your referral. So that's another thing is ask friends and family who they go with. All right, Troy, do you have one? [00:06:55] Speaker B: I do. This is a great question. We hear this a lot. This is from Tammy. She asked, where does average appreciation play into your formula for determining a good real estate investment? I don't think appreciation is the thing we actually figure into our purchase. [00:07:10] Speaker C: Right. [00:07:11] Speaker A: We don't. And I think the reason for that is that it's kind of a bonus. Yes. And if you look at the charts, you know those. Those charts, Billy shows them. We've shown them, too. And you look at real estate, is that a 50 year chart or 80 year chart? It's a. It's a long goes back. [00:07:30] Speaker B: Yeah. [00:07:31] Speaker A: So even though there might be like little downticks. Upticks. But the trajectory is continually up. And so the appreciation, I would say, is kind of icing on the cake. But at the same time, that's really where you make the money in real estate. [00:07:47] Speaker B: That is where you make the money. Like Billy always says, if you hold the real estate for two sides cycles, then you're going to have a lot of wealth. So you hold through the cycles, it makes all the difference. And you said it really well, that appreciation is a bonus because when we're buying an investment property, we're buying an income stream. And so we're running the numbers, we're calculating how much it's going to make us positive every month. And so we buy that income stream. The appreciation is the icing on the cake. That happens later. [00:08:14] Speaker A: And that's where, I mean, it is where people definitely make wealth and real estate. And I know, too, sometimes on the west coast, it's a high appreciation market. So if someone can weather right if they don't need the cash flow and they kind of have unlimited resources, in a way, there are people that go in and they invest for appreciation, but they're not the people that have to dump that property in a down market. And with that too, like even here in Colorado Springs, the rent ratios are way off. So we try to get at 1%. And here I don't even know if you can get at half percent. It's almost like 33% or something. So this would be an example of an appreciation market, but you'd have to be willing to take hits on your income along the way, which we don't recommend. I mean, you might have a unique situation, so, but we've just like that statistic too, where properties, they quadrupled in four years. I know we are just closing on our property and it doubled in five years. [00:09:17] Speaker B: Wow. [00:09:18] Speaker A: So we don't bank on that when we buy it. Right. But when it happens, let me tell you, it is a blessing. [00:09:25] Speaker B: That's right. It really depends on when you sell it, where you're at in the cycle. [00:09:28] Speaker A: Yeah. [00:09:29] Speaker B: Because you could hold it for five years and lose money. I've seen people, I've seen that happen, too. [00:09:33] Speaker A: Where if they would have sold it at the two and a half mark, right, two and a half years mark, they might have made a lot of money. Don't sell when the market's down. [00:09:40] Speaker B: But if it's income, it doesn't matter what the value is, doesn't matter where the, what the market says. You're still collecting money every month. [00:09:47] Speaker A: Yeah. And that's that cash flow. [00:09:50] Speaker C: Yes. And Bill Brauncheck says this. You can get a little bit of insight. If there's a Starbucks that's getting built just recently, if a Walmart came in, if businesses are growing, they've ran the numbers for you and research for you, and more than likely they believe that this area is going to increase in value. So that's one thing. It's no guarantee, but at least that's, hey, there's some stuff getting built around here. [00:10:15] Speaker A: Yeah. That's really good. That is. That's a really great question. [00:10:19] Speaker C: Yeah. [00:10:19] Speaker B: Yeah. [00:10:19] Speaker A: All right, Mike. [00:10:20] Speaker C: All right. What are the most important factors to consider to determine if buying a single family home is a good choice? [00:10:29] Speaker A: Boy, that's a broad question. [00:10:31] Speaker B: That is. That is. [00:10:33] Speaker A: So are they looking at it from a primary dwelling, do you think? Or maybe. Maybe we should answer it from a primary dwelling and an investment. [00:10:41] Speaker B: I think that would be good from. [00:10:43] Speaker C: Daniel, by the way. [00:10:44] Speaker A: Okay, great. Who wants to start with that one? [00:10:46] Speaker C: Go ahead. [00:10:47] Speaker B: Yep. It could be. If we're talking primary residence, then the most important thing is that you're happy there. [00:10:54] Speaker A: Yes. [00:10:55] Speaker B: It's really, if you're buying a home, that's. I always call that more of an emotional decision than anything. You've got to be happy there. It's the place where you're going to go to escape the world, and you want to know that you're going to enjoy it. So that make that emotional decision. But if it's an investment property, I always look at income. How much am I going to make from that property? That's the number one thing I consider. [00:11:16] Speaker C: How about you? Yeah, I think, too, the crime rate. I think if it does cash flow, I can buy some houses in certain areas in my lovely city that I probably wouldn't want to go there. And if I have to even look at the property unless I'm, you know. But every city has that, so. No bad. Those are pueblo, but those are always the ones. [00:11:41] Speaker B: I call them value investing because they're so attractive, they're cheap. Anybody can buy them. [00:11:46] Speaker A: Right. [00:11:46] Speaker B: And there's a reason for that. [00:11:47] Speaker C: Yeah. You have to dodge bullets. But anyway, so I think the crime, if the cash flows there. Well, the second thing you probably ought to look at is the crime. [00:11:57] Speaker A: That's really good. Yeah. And we give you ratios. Many of you have been watching this, are listening to this podcast or watching it now, or have come to our events, and you know that there's certain ratios that we follow and it really keeps you in that safe place. But to even vacation rentals, I like to buy those where I enjoy being. You know, if you're going to do anything, like brrrrs. Any updates? If you're going to do any ongoing oversight, I think it's kind of nice to purchase in an area you actually enjoy. [00:12:29] Speaker C: That's a win win. [00:12:30] Speaker A: That is win win. All right. That's really good. All right. This is from Janice. Janice says this. I'm doing this alone so far, other than your awesome help. Thank you, Janice. That's really sweet. She said, how can I find help locally? Who to seek out as far as choosing property? [00:12:51] Speaker B: Oh, wow. That's a great question, Mike. Why don't you start with that one? [00:12:55] Speaker C: I think, you know, you have to make some good connections with a good realtor who owns property, who's an investment, who invests herself or his self. And so you have to do some interviewing with realtors, I think. And having a real estate club in a small town is usually good. Why said small town? Bill Bronchik had one here in the city of Denver for many years. [00:13:20] Speaker B: One of the biggest in the country. [00:13:21] Speaker C: Yeah. And so I think that would be a great place to start. [00:13:24] Speaker A: I do, too. [00:13:25] Speaker B: Yes. [00:13:25] Speaker A: I do think that real estate agent is really key. [00:13:28] Speaker C: It is. [00:13:29] Speaker B: Absolutely. Absolutely. And of course, when you're picking that person, you need to take time to really pray over that relationship. Make sure it's somebody that God wants you to connect with and not somebody that the enemy might be putting in your path. And you'll be able to discern that real quick if you just take a little time and pray through it. [00:13:45] Speaker A: That's really good. And we get some practical advice along with that, too. Like your real estate agent, if you are purchasing investment property, they need to be an investor too, is what we say, because otherwise, you know, they don't feel that investor, what it's like to be in that seat and might be just focused on closing the transaction. So that's so good, you guys. Awesome. All right, Troy, what you got? [00:14:09] Speaker B: All right, this is a question we get a lot about values. And specifically asking if we trust Zillow or Redfin values the most, which one do we find most reliable? That's interesting because it's very easy to just look and say, what's the zestimate on a property? [00:14:28] Speaker A: Yeah. [00:14:29] Speaker B: And I find that that's either right on or way off. And we're never sure, aren't we? [00:14:35] Speaker C: I like looking at it, though. It does. [00:14:37] Speaker A: It does. [00:14:38] Speaker C: I think it gives me a clue at least. Ballpark, anyway. [00:14:42] Speaker A: Yeah, yeah, I think so. I have just started to use Redfin once in a while, and I have seen big variances between the two. Zillow. I think for the most part, those estimates give a good guide. Now, I have seen some. This is the problem, I think, with some of those is if you've got something happening in that neighborhood that either maybe sold super high or sold super low, there's really no intelligence, you might say, in that assessment, to know what the condition of that property was. And so I have seen that where maybe one property is redone, it looks amazing. Another property is not redone. And it's a similar square footage on that zestimate. But, you know, you can look at that and just realize, okay, these are not, you know, or these are apples and oranges. It's not comparing apples to apples, but I think the rent estimate, it has been actually really helpful. And you don't stop there. Right. But it gives you a really good idea. And now they've got all the databases that are coming in and it actually gives you a lot of good information. [00:15:52] Speaker B: Does a lot of good information. But you mentioned looking at the other properties to see what they are, and I think that's really the key. You have to, whether you're using Zillow or using Redfin, you have to look and see what else sold in the neighborhood. [00:16:04] Speaker A: Yeah. [00:16:05] Speaker B: And you do have to do like Karen said and click on the pictures and look. Was it updated? Was it not? That's going to give you the best value. So don't just stick with what Redfin or Zillow might say right off the bat. Take time to dig into it and look at the details. [00:16:18] Speaker A: Yeah, that's good. And that's where a good real estate agent to. Definitely. [00:16:21] Speaker B: Absolutely, yes. [00:16:23] Speaker A: All right, this is a great question. This is from Wayne. And Wayne says, should we consolidate debt to a 0% credit card? We actually have a lot of questions in here about what to do with consumer debt. How important is it to get rid of before you start investing? So have you guys ever consolidated debt to a 0% credit card? [00:16:48] Speaker B: Not a credit card, no. [00:16:50] Speaker C: But Billy's triple x. He has the debt snowball teaching. [00:16:55] Speaker A: Yeah. [00:16:56] Speaker C: So that's really good. [00:16:57] Speaker A: Yeah. To tackle debt. I have a friend that, that is kind of savvy with this, but she will actually kind of move debt around to 0% credit cards. So I don't know, it could have an impact if you have that many hits on your credit for inquiry. But I could see where it might help with a project to choose a 0%, where you're able to maybe fund some construction without paying interest, because really, the finance charges, when you look at a flip or a brrrr, it really gets up there. [00:17:32] Speaker B: That's where it'd be good to use a 0%. [00:17:34] Speaker A: Yeah. [00:17:35] Speaker B: So I've never transferred debt to it, because sometimes to transfer it, they attach a funding fee of two or 3%, which kind of negates the whole 0% philosophy. And then I try to watch credit score, too. If I go out, get a new credit card, and it's got a ten or a $20,000 limit at 0%, and I roll it over the debt on that and max it out, I've just wiped out my credit score. Yes. [00:17:57] Speaker A: That is good. You know, with that, the guide, it's like, keep it at 33% right. Of the balance or less. And that really works because, I mean, I'll notice, like, maybe I have a lot of business expenses that are showing up before this statement. I haven't had a chance to completely pay that down. And I get this little note from experience, oh, your credit score has decreased. [00:18:23] Speaker B: And it'll take a big decrease if. [00:18:25] Speaker C: You leave too much of a balance on there. [00:18:27] Speaker B: Yeah. [00:18:27] Speaker C: Known that. Instead of waiting till it's due. [00:18:30] Speaker A: Yeah. [00:18:31] Speaker C: I sent in a check halfway point that helped keep my credit score up, because they just. I'm assuming they just look at it at the end. Oh, it's 75% of your total. And so if you pay half or pay it off, you know, in two weeks, instead of that, it keeps it down. [00:18:52] Speaker B: That's a good suggestion. [00:18:53] Speaker A: It is a really good suggestion. All right, that's awesome. Okay, who is next? [00:18:59] Speaker B: All right, I got one. It's not quite real estate, but we do get this question a lot. Eric asked this. He asked, how do you go about finding those divine relationships in business? [00:19:09] Speaker A: That is a great question. [00:19:10] Speaker B: Great question. Yes. So he goes on to ask if there's people you pursue and reach out for and looking for specifics, but I think we should all share a little something on that because it's very important. [00:19:22] Speaker A: Very important. [00:19:23] Speaker B: And for me, the number one relationship to always maintain is a relationship with the Lord. [00:19:28] Speaker C: Yeah. [00:19:29] Speaker B: So spend time praying with him and thanking him for those divine connections, because I've met people at the grocery store that wound up being a divine connection. I've met people in business. I've had people walked into my office at the most inopportune time to where I thought, I don't have time for this. What am I doing wasting my time? And it turned out to be a divine connection, so you have to stay open as well. [00:19:54] Speaker A: Yeah, that's really good. How about you, Mike? [00:19:57] Speaker C: Well, you know, Billy and Becky, you remember how they do this prayer together this morning? And I don't know if you all notice this, but they pray for divine connections. [00:20:06] Speaker A: They do. [00:20:06] Speaker C: And so I believe that's a big thing that at least you're asking God. Hey, I believe that, you know, Lord for divine connections and I believe us all of this being connected to Billy and having divine connections. And so I think, you know, first of all, just to be honest, the Bible says if you want good friends, you know, make sure you show yourself friendly. So when people say I have no friends, I go ding, ding, ding, ding, ding. You may want to show yourself a little more friendly. But anyway, I probably shouldn't have said that. But anyway, I think, you know, if you're believing God for divine connections, he's going to make sure that they cross your path. [00:20:45] Speaker A: Yeah, that's so good, you guys. The only thing I would maybe add to that or just give something more to think about is to position yourself in atmosphere or environments where people are kind of like minded. And that's a lot of what we see with wealth builders. We've had like our divine connection has happened because we have put ourselves in a position to be part of the wealth builders family. So when you, when you decide that you're going to go to a wealth builders event or maybe it's another event in your area, you really up your chances of meeting really good connections. [00:21:21] Speaker B: So that is so good. That is so good. Yes. [00:21:24] Speaker C: You may have to step out of your comfort zone and not just stay in your seat when you're at the convention, get up and walk and mingle a little bit. Yeah, that's really good. [00:21:33] Speaker A: Oh, and you know, I'll just share this, too. We've had people from other states and they said they come and they've joined coaching and they said we have found our family or like found our tribe because the Lord had put this wealth building, you know, idea in their heart. But as they were looking for people in their geographic area that shared that same passion, they weren't there. And so they connected with wealth builders and have made connections with us, of course, because they're in coaching, but with other people with wealth builders. And they just said that's where that eclissee or that's where that like mindedness took place. So sometimes it's not even in your geography. [00:22:17] Speaker B: That's exactly what happened with my wife and I. [00:22:19] Speaker A: That's true. [00:22:20] Speaker B: We were isolated. We felt like over there in Melbourne, Florida. [00:22:24] Speaker A: Yes. [00:22:24] Speaker B: Really working to connect with people and a few friends we had just weren't really meeting it. One trip to wealth builders, instant family and now this international connection, it is just a beautiful thing. You just trust God, you follow his heart, and he will always line you up with the right people. [00:22:40] Speaker A: It's true. And now we're kind coming down there. There's a lot of people from wealth builders that are purchasing down in that area. So it's sort of like God is bringing those connections even to your geographic area. [00:22:52] Speaker B: Yes. [00:22:52] Speaker A: Wow. This is great. All right, you guys, our time is up. Boy, did this go fast. But I have good news for all of you, is we're going to do a part two and we're going to cover more questions because we really want to be able to answer things that you are thinking about. So thank you so much for joining us today in the Wealth Builders podcast. Join us for part two next week. God bless you and make it a great rest of the day.

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